- Friday, 8 May 2009Following the news that the Bank of England's monetary policy committee (MPC) has elected to maintain the historically low base rate of 0.5 per cent for a further month, consumers have been given a warning about the future of their debts.
Independent mortgage broker John Charcol predicts that debt problems could worsen rapidly when the MPC does begin to increase rates.
Anyone on variable rate mortgages could be at greatest risk - especially those on interest-only packages - the broker adds.
Senior technical manager Ray Boulger comments: "When the MPC starts increasing Bank Rate it will move up quite quickly, which could be very uncomfortable for anyone still locked into a variable-rate mortgage at that time."
Meanwhile, those who are emerging from high fixed-rate deals are told that any decrease in their monthly payments could be used to clear some debts elsewhere.
The Bank of England explained that its decision was made in part due to the fact that inflation on the consumer prices index remains almost one full percentage point above its ideal target of two per cent.
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