6 July 2007
Consumers are waiting to feel the effects of the Bank of England's decision to raise interest rates to 5.75%.
Although the move was widely expected, the Monetary Policy Committee's choice to raise rates by 0.25% is likely to be a concern to borrowers across the UK.
Although credit card and loan interest rates are less sensitive to base rate changes than mortgages, consumers may still be affected by the rise as lenders decide whether borrowers are in a position to repay their debts.
The latest rate rise is the fifth since last August in an attempt to curb inflation and the highest level in six years.
Many city analysts are predicting a further interest rate rise up to 6% later on in the year.However, Trevor Williams from Lloyds TSB Corporate Markets believed another increase in base rates in the near future would come soon for the economy.
"The effects of the earlier increases haven't yet come through," he said.
"We are at a very delicate stage and the danger now is that they overdo it."
© 2008 Adfero Ltd
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