Consumers looking for competitive personal loans and secured loans have been alerted to a new prediction that interest rates will finish 2007 at five per cent.
In recent months, issues such as rising utilities bills and spiralling house prices across the south of England, Scotland and Northern Ireland have contributed towards inflation rising above chancellor Gordon Brown's long-standing target of two per cent.
However, Howard Archer, chief UK and European economist at financial analysts Global Insight, has predicted that inflation will average out at 2.2 per cent over the course of the year.
And he also suggests that this could have a knock-on effect upon interest rate decisions made by the Bank of England's monetary policy committee.
More specifically, he suggests that rates will hold at their present level of five per cent at the end of 2007, which could reassure people with loans concerned about further repayment hikes.
Yet he has also raised the possibility that rates could experience a temporary quarter-point rise early this year.
"There is a very real chance that they could rise up to 5.25 [per cent] in the first quarter," he said.
"But if they do that, then we fully expect them to be back down to five per cent by the end of 2007."
Holders of personal loans alerted to prediction on lending rates
Holders of personal loans alerted to prediction on lending rates
Wed, 03 Jan 2007
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