Interest rate rise implications

On 2 November 2017 the Monetary Policy Committee voted to increase the Bank of England base rate to 0.5%.

Following the increase the government has confirmed that HMRC interest rates for late payment, which are linked to the base rate will be increased during November 2017.

In addition with further interest rate rises forecast over the coming months there will be particular pressure on households that have got used to budgeting and just about surviving on very low interest rates over the last several years. Any interest rate rise could well put households that are already struggling to make it to pay day under further pressure and the rise in those unable to deal with mounting debt as highlighted in this newsletter is likely to increase.

Of course in these situations it is important to acknowledge that the pressure of increasing debt and financial insecurity has wider implications and can have severe impacts on health (both physical and mental) and also can cause strain on relationships. It is vital therefore not to ‘bury your head in the sand’ and taking early advice can often result in beneficial outcomes from not just a financial perspective.

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