The Monetary Policy Committee has maintained the Bank of England base rate at 0.5% yet again, keeping the insolvency advice industry on tenterhooks as economists increasingly anticipate a rise.
Last week we reported how the historically low base rate – and the extended period over which it has remained so low – has driven some savers into financial difficulty, with the elderly particularly likely to need insolvency advice if their pension planning relied on income generated from savings interest.
But in the October meeting of the MPC, there was still no solace for affected individuals, as the members once again voted in favour of a low base rate, which benefits borrowers rather than savers.
It seems increasingly likely that a rate rise will come in the near future, however – and November’s meeting could be a likely contender.
Historically, rate changes after a long period of stability often coincide with the publication of the quarterly Inflation Report, which comes in February, May, August and November.
That makes next month’s meeting arguably more likely to see the first rate rise of the new economic cycle – and could see the insolvency advice ‘swingometer’ move back in favour of savers, putting borrowers under greater pressure instead.