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Rise in interest rates expected, study finds

Rise in interest rates expected, study finds

Category: Loans

Updated: 11/02/2009
First Published: 11/02/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers are increasingly expecting a rise in interest rates, according to a survey.

A poll by Lloyds TSB Corporate Markets has revealed that just 20 per cent of those questioned expect rates to have dropped in 12 months, with 44 per cent predicting them to be higher.

Last week the Bank of England lowered the official base rate by 0.5 per cent, bringing it to its lowest-ever level of one per cent.

The move could mean that those carrying out a secured loan comparison find interest is cheaper, but a growing number of people were shown to expect higher rates to return over the coming year.

Trevor Williams, chief economist at Lloyds TSB Corporate Markets, remarked: "Looking ahead to higher rates is not a bad thing; consumers are less likely to struggle when rates eventually do rise again, once the economy is recovering."

The balance of 24 per cent who predicted a increase represented a rise from four per cent a month ago.

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