Ahead of the Bank of England interest rate decision this Thursday (2 November) research from Equifax, the consumer and business insights expert, reveals 42% of Brits are worried about an interest rate rise.
The online survey, conducted by YouGov, found that only 5% of people expect a rate hike within the next month, with 21% believing it will happen within the next one to three months, and 20% in the next three to six months.
More than 1 in 10 British adults with a variable rate or tracker mortgage (11%) said they couldn’t afford any increase on their most recent monthly repayment, with only 34% able to afford an increase of less than 5%. Over half (52%) of those on a fixed rate mortgage said they’re worried about having to make higher repayments when their current fixed rate mortgage deal ends.
Jake Ranson, Banking and Financial Institution expert at Equifax UK, said, “This research shows that the longstanding low rate environment has lulled many people into a false sense of financial stability. This could soon start to unravel. If the Bank of England goes ahead with a hike on Thursday many people could find managing their mortgage or other loan repayments a struggle.”
“Individuals need to factor higher interest rates into their financial planning and shouldn’t rely on the belief that rates will remain low indefinitely. Financial institutions must also be more alert to individuals who may not be able to handle increased payments. At a time of severe economic uncertainty, it’s essential that customers don’t borrow beyond their means and understand the risks of any loan they take on.”