Summary
THE Bank of England's decision to raise UK interest rates again yesterday, just a month after the last rise, has fuelled fears that the bank is now turning nasty with consumers and house buyers who have, so far, ignored a string of signals to mend their extravagant ways. That's now four quarter-point increases since November, taking what is known as the bank's repo rate from a 48-year low of 3.5% to 4.5%.
The pace at which the medicine is being doled out has quickened, from a quarter-point spoonful every three months to a quarter-point monthly. Some monetary hawks were even urging the bank to up the dose to an invigorating half-point yesterday. There is growing expectation of more to come, of rates hitting - or even topping - 5% by the end of this year. Some doomsters are even pointing to rates of 6% or even higher through 2005 before this stand-off is finally resolved. It is however, in many ways, a very British stand-off.See the full content of this document
Extract
Why the Gloves Are Coming Off to Put a Dent in Our Debt
The bank's repo or base rate has long been the principal determinant of what we pay for our mortgages. It is much less immediately significant for what we pay out on our credit and store cards or for other loans, whose terms are fixed at the outset, over a period of several years. However, even at ...
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