Comments on the Bank of England base rate

“The Bank of England’s decision to raise interest rates to a 13-year high today will be welcomed by savers, many of whom may not remember the last time the base rate was 1% or above. But borrowing continues to rise with  consumers feeling the pinch of the cost of living crisis and this rise will increase the cost of variable loans including on credit cards and mortgages. Many consumers will see their disposable income cut even further.

“In March, inflation reached a 30-year high, and it is predicted that this will increase further over the next few months. Tens of thousands more people will struggle to balance the books, and many will fall into problem debt.

“Our data shows that the number of consumers in arrears on their credit card and motor finance repayments is rising, with loan defaults at more worrying levels. Lenders, utility companies, telcos and other credit providers should be paying close attention their customers’ repayment behaviours and acting early to help those that show signs of being in difficulty.”

Paul Heywood, Chief Data & Analytics Officer at Equifax UK