Interest rates 'extremely low' but inflation 'could spark premature rate rises'

“But while that is clearly good for borrowers today, should interest rates rise, payments will get less affordable as fixed term deals expire.

“Pushing your finances to the limit to borrow as much as possible has never been a great idea, but when interest rates look like they can only head in one direction, it’s particularly dangerous.”

Mr Khalaf went on to discuss the potential for a rise to interest rates – as well as some potential issues which could occur amid any raise there could be.

“Right now, there’s no sign the Bank of England has any appetite to raise rates for the foreseeable future,” he said.

“All being well, when rates do rise, they will do so gradually, allowing consumers to slowly adjust to the higher cost of borrowing.

“The potential fly in the ointment is inflation, which could spark premature rate rises if it begins to take hold. Then, Threadneedle Street, we have a problem.

Leave a Reply

Your email address will not be published.