It seems almost inevitable that Thursday’s meeting of the Bank of England committee will sanction a further quarter percent rise in the UK base rate. Recent comments by some members of the committee have led many to believe that a move upwards is almost certain, a view further strengthened by recent news confirming that property prices have risen again, and inflation is still fairly strong.
Time and time again the consumer seems to be oblivious to the potential problems which are being stored up in both the property market, and the personal finance market, where many will be staring financial ruin in the face unless habits are changed very soon. The Bank of England have given the UK consumer enough time to understand the seriousness of the situation, and every interest rate rise is stacking up more misery.
However, there are some observers who believe that rates may have peaked for the time being, citing a softening in the property market (a view not supported by recent figures) and a general slowdown in the economy. Whatever happens on Thursday it seems that the next 12 months may be very difficult for a large number of the UK population.
Even though views are mixed with regards to the direction of interest rates in the short term, few are willing to actually call the top of the cycle – a worrying sign if ever there was one!