12 June 2006
Consumers are expecting the cost of borrowing to increase over the next year, according to a survey.
Lloyds TSB's consumer barometer study found that 66% of those asked were expecting a rise in interest rates, despite the Bank of England's decision last week to keep the base rate at 4.5%.
The number of people expecting a rise in rates was up from the 59% recorded in April and was the highest since April 2005.
"This latest survey indicates that households across the UK are bracing themselves for the inevitability that the next rate move will be a rise," said Trevor Williams, chief economist for Lloyds TSB Financial Markets.
"Although the MPC (Monetary Policy Committee) kept rates on hold last week, a hawkish quarterly Bank of England Report in May and the first vote by an MPC member for a rate rise since May 2005, hinted at the first nudge towards a 25bp (base points) rate rise in the final quarter of the year," he explained.
Only 7% of the 2,000-strong consumer panel thought rates would decrease over the next 12 months.
Compare secured loans and find the best secured loan for you with the uSwitch.com loans comparison service
© 2008 Adfero Ltd
Content for the uSwitch.com market news service is provided by a third party, Adfero Ltd. Whilst uSwitch.com makes reasonable efforts to check the reliability of this content, uSwitch.com does not guarantee the accuracy thereof or endorse the views or opinions given by Adfero Ltd, unless expressly stated otherwise.