Interest rate hike bad for economy and debt

Published on 1 January 1970 by Raffick Marday

Interest rate hike bad for economy and debtIncreasing the base rate of interest could be 'catastrophic' for the UK's economy. That's the view of one expert.

Michael Baxter, Editor of Investment and Business News made his comments following a report suggesting the rate could go up to 3.5 per cent by the end of 2011.

That could have a big impact on the interest rates applied to credit cards and bank accounts.

Mr Baxter believes the current economic uncertainty means the rise could have a disastrous impact.

He says "Apparently we had a crisis earlier this month, which could have been as serious as the Lehman Brothers going bust. This goes to prove the economy globally is still very vulnerable."

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