You are here: Home - Uncategorized -

Rates gloom for consumers

0
Written by:
19/12/2006

Heavily indebted consumers are more concerned about possible interest rate rises than at any time since November 2004, a survey undertaken by Lloyds TSB has found.

Nearly 80% of those surveyed said that they expected interest rates to be higher in a year’s time than they are now, with only 4% reckoning that they will fall over the course of 2007. Fears of higher costs appear to outweigh possibly better returns from saving and investment.

Some retailers have expressed concern that fears of rising interest rates are having an adverse effect on consumer spending. Woolworths and Debenhams have warned of a tough Christmas shopping period ahead and some retail analysts in this area of UK investment reckon many mid-range shops will have their worst Christmas for 25 years.

Trevor Williams, Lloyds TSB chief economist, said: “Rate rises have dampened consumer optimism… despite the Bank of England holding the rate at 5% this month, consumers are expecting the gloom to last well into the New Year and potentially better returns from saving and investment are pushed into the background.”

He continued: “However, the widely held belief that rates are on an upward spiral is at odds with the views of the majority of economists who believe that rates may not rise any further in the UK investment arena and, perversely, does not seem to have quashed the insatiable drive that continues to buoy the housing market.”

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Pensions ‘threaten’ employers’ survival

Some companies find their pension obligations so onerous that they are ’threatening’, and they might face bankruptcy if they were to improve...

Close