EasyMoney CEO: Interest rate decision won’t ease pressure on borrowers
The Bank of England’s decision to keep the interest rate on hold “will do little to ease the financial pressure” on borrowers, according to Jason Ferrando, chief executive of easyMoney.
The BoE, much like its counterpart across the Atlantic, decided to hold its base rate at 5.25 per cent, in a widely expected move.
With rates still far above pre-pandemic levels however borrowers will continue to be challenged.
For Paul Heywood, chief data and analytics officer at Equifax UK, the end of rate hikes appears to have arrived and consumers are adapting to the new reality.
However, he added that there has been a steady increase in the total balance across credit cards, which is now 7 per cent higher than this time last year.
Read more: SMEs rush to repay Covid loans amid higher interest rates
“The higher balance is one of the factors driving increased monthly credit card repayments which themselves are now sitting 13.2% above figures seen before the onset of the cost-of-living crisis in late 2021,” he added.
“Equifax and our lending partners remain well prepared to ensure that consumers are effectively supported throughout their borrowing journey and can access the credit they need to live their financial best.”
The decision to hold interest rates should be seen as a welcome development for the property market, according to Chris Hodgkinson, managing director of House Buyer Bureau. Although deal numbers and sold prices are down, impacted by the higher cost of borrowing, there are clear signs that the property market is starting to stabilise, he said.
The decision today “should allow buyers and sellers alike to act with a greater degree of confidence going into 2024”, he added.
Despite the pressure on borrowers, there is a silver lining for those looking to accumulate a savings pot, easyMoney’s Ferrando noted.
“Returns are favourable, although how favourable depends on where and how you choose to invest your money,” he said.
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