Rate rise holds no fear for borrowers
The survey found that whilst a rate rise in 2015 is widely anticipated 62% of people surveyed said it would only impact their monthly budget a little or not at all.
Some 22% of people believed a 0.5% rise or more would not affect their monthly budget at all, whilst 40% said it would only impact it a little.
Meanwhile just over 20% of those surveyed said a first rise from the Bank of England since 2009 would squeeze their disposable income quite a lot, with seven per cent admitting it would have a significant impact. Ten per cent said they didn’t know.
The survey of 2,000 people also found that 65% of people expect the base rate to rise by at least 0.25% in the next 12 months in line with economist’s expectations.
A fifth (20%) expected a rise of 0.25 per cent while 45% thought it would jump by 0.5% or more. A further 20% of respondents admitted to having no idea.
Paul McGerrigan, chief executive of Loan.co.uk, said: “The Bank of England has told us that when rates eventually do rise, they will do so gradually, which is encouraging.
“If we do see the first rate rise in the next 12 months in line with economic forecasts, it won’t be large and borrowing rates, whether it be for a mortgage or a secured loan, will remain low.”
He added: “The results of the survey show that households recognise that although the base rate can’t stay at 0.5% forever, it appears it won’t rise sharply as in the past.
“This, combined with an increase in disposable income as a result of falling oil prices and the knock on reduction of shop prices, means consumer confidence appears to be higher than it has been for several years.”