The Bank of England yesterday squashed rumours that a rise in interest rates in the UK would be coming sooner or later, stating that there is no current need for such a rise to occur due to the current state of the global economy.
Many sources have been claiming that an interest rate rise would be on the way in early 2016, with Mark Carney, the governor of the Bank of England hinting a mere 6 months ago that a rise in interest rates would be likely during the start of 2016.
Speaking about this, the governor stated that “Last summer I said that a decision as to when to start raising Bank rate would likely come into sharper relief around the turn of the year,”
“Well, the year has turned and, in my view, the decision proved straightforward – now is not the time to raise interest rates.”
So, what does this mean for the people across the UK who are in debt?
Good News for Debt Payers
For those people who are struggling to pay off their debts in the UK, this news comes as a relief- for now at least.
Low interest rates mean less money to pay back, particularly on any loans that are tied to the Bank rate, giving those who are currently in a repayment system a much needed period of time where the amount that they are paying back with interest will remain the same for the time being.
It is hoped that many of these people who have debts to repay will be able to get a better portion of the amount that they are required to pay back paid off before the inevitable rise in the future.
Not So Good For Savers
For those people who were looking forward to a rise in interest to boost their savings, this announcement will probably come as a bit of a blow.
Frozen interest rates will mean that savers who have money saved in high interest bank accounts will have to wait even longer to reap any additional benefit to what they are getting now. Although this won’t mean that they will be getting any less money, it means that they won’t be able to benefit from earning more money from their savings.
I’m In Debt, What Should I Do?
If you’re currently in debt, enjoy the relief of not having to pay even more on top of your repayments, but remember that this interest rate won’t stay the same forever. It’s important to continue with your repayments and try to pay off as much as you can afford to bring how much you owe down even further.
If you neglect paying your debts back and the interest rises even further, you may find that the repayments start becoming more than you can afford, sending you further into debt.
However, Debt Advisory Services Scotland Ltd are here to help you with any debt issues that you may have. From repayment help to advice on what to do if you have been mis sold PPI, please contact our expert team online today and we will be delighted to help you with your debts.