Monday, June 11, 2007
Category:
Consolidation
A recent vote by The Bank of England’s Monetary Policy Committee was made to raise the official Bank Rate paid on commercial bank reserves by a quarter percentage points to 5.5%.
The output growth in the United Kingdom has remained firm. Although indicators of consumer spending have been unstable, business investment has been strong leaving an underlying picture of steady growth. Credit and broad money continue to grow rapidly. The international economy is continuing to expand rapidly.
CPI inflation rose to 3.1% in March but is likely to fall back to around 2% as lower gas and electricity prices and weaker import price inflation mean a change in inflation. On the other side of things, the margin of spare capacity in firms appears limited and there are signs that businesses are better equipped to push through price increases. In relation to the 2% target, in the medium term, the risk for the future of inflation remains positive.
The increase in Bank Rate of 0.25 percentage point was judged necessary by the Committee to meet the 2% target for CPI inflation in the medium term.
............................................................................................................................................................
Base rate rises may effect homeowners with variable rate mortgages as their monthly repayments can potentially rise. This may then increase homeowners’ monthly outgoings. Homeowners may wish to opt for a fixed rate mortgage as they will know the exact amount that needs to be paid each month. Further, should they have multiple credit and store cards, they may wish to consider a debt
consolidation loan to wrap multiple repayments into one. One of many options, a debt consolidation loan will allow homeowners to know the exact date and amount that will be debited from their account each month, provided that they opt for a fixed rate debt consolidation loan. Debt consolidation loans can be repaid over a term to suit the borrower from 5 to 25 years. It is however important to remember that when repaying borrowing over a longer term, overall interest charges will increase.
