Financing analyst alerts personal loan customers to possible rate rise

Fri, 23 Mar 2007

A financing analyst has questioned the impact that the Budget will have on banking customers and also hinted that interest rates may soon go up, in news that may concern many people with an outstanding personal loan.

On Wednesday, March 21st 2007, chancellor Gordon Brown delivered his 11th Budget address to parliament in which he announced a range of new financing measures.

For instance, he cut income tax by 2p to 28p, raised vehicle excise duty for gas-guzzling vehicles and announced that the inheritance tax threshold would rise from £285,000 to £350,000 in 2010.

However, Tom Vosa, chief economist at financial services provider Clydesdale Bank, blasted the Budget as one that "threatened little but delivered even less".

And he warned that the government was underestimating the likelihood of the Bank of England's monetary policy committee opting to raise interest rates in the coming months, personal loan customers may be interested to know.

"It seems that they [the Treasury] are no longer expecting to see any further increases in the UK this year," he said.

"Given the current spike in inflation and the strength of the UK housing market, we are less convinced."

If the base rate rises, people with an outstanding variable-rate personal loan could find their monthly repayments increasing.

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