- 06
- Jun
Recent interest rate rises are beginning to impact upon consumer borrowing and spending, figures from Nationwide reveal.
According to figures from the financial services provider, the effect of four base rate rises over the last 12 months has seen a fall in personal loan borrowing and mortgage uptake.
Chief economist Fionnuala Earley said: "Higher interest rates have not affected consumers’ overall confidence, but they do seem to be having an impact on their willingness to spend."
She added that borrowers "responded sharply" to the Bank of England’s decision to raise the base rate to 5.5 per cent last month, which in turn could impact upon consumers’ ability to make home and secured loan repayments.
The study also indicated that Britons believe property prices will rise by 4.5 per cent over the next six months.
Yesterday, Trevor Williams, Lloyds TSB Corporate Markets chief economist, claimed the Bank of England is unlikely to increase the interest rate later this week as the effect of earlier rises "are only just starting to show through" on consumer borrowing.
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