BoE base rate: comments on impact to lower and middle income households
“In the face of double-digit inflation, a looming recession, and interest rates at a 40-year high, today people are facing a nail-biting wait to find out what the Chancellor has in store in the now delayed Autumn Statement. The prevailing wisdom is that the UK consumer will be facing rising taxes and are already looking to find the best savings rates as they reduce spending and brace for what will undoubtedly be a challenging winter.
“The Government’s decision to delay the Autumn Statement may have spared the Government from unhelpful Halloween headlines, but it looks to have also impacted the Bank of England, which has acted resolutely to increase interest rates to levels not seen since the turn of the century. People now face tough borrowing decisions, particularly those on lower incomes whose disposable incomes have been eroded thanks to increased food and fuel prices this year. Middle earners will also continue to feel the pinch as mortgage rates rise, compounded by the expectation of falling house prices.
“Our advice to anyone who is worried about their finances, especially household bills or their home or car finance, is to reach out to their provider or lender for support. Lenders have a duty of care and are well equipped to help concerned customers through a wide range of options. The banks will be looking at measures to help customers in anticipation of difficult times ahead, but all would prefer to help customers through the dark days wherever possible.”
Paul Heywood, Chief Data & Analytics Officer at Equifax UK