Belt up now for a bumpy economic ride in 2018
WE’RE constantly being told by politicians, commentators and pundits that the economy is in good shape and that we have nothing to worry about.
But these views don’t seem to be backed up by statistics which suggest that personal debt is at its highest level for years and that many people are struggling week to week and month to month because their wages are still growing much more slowly than prices.
Inflation is on the increase again, which is what prompted Bank of England governor Mark Carney to comment last week that he thought we would see interest rates rising in the very near future.
Consumers are spending a higher proportion of their take home pay on essentials and many are now paying for these essentials using a credit card because they don’t have enough money each month to cover everything.
If that is the situation right now, when interest rates are really low, it suggests that many of us are in for a really bumpy ride when they start to increase.
If your budget is tight and you are worried about a rise in rates then perhaps now is the time to make sure that your finances are in order.
If you have a variable rate mortgage, you might want to look at remortgage options as soon as you can.
Some lenders withdrew some of their fixed rate deals in the wake of Carney’s announcement last week but there are still some decent deals out there if you move quickly.
Likewise if you pay for your gas and electricity on a standard package, you might want to see if there are fixed options for you that might save you some money.
We’re coming up to one of the biggest spending periods of the year so it’s not a great time for rates to increase – especially if you intend paying for Christmas with plastic.
If you do, make sure that the card you have is competitive or, better still, move to a card that has a zero per cent option.