Interest rates rise again

INTEREST RATES have risen to 4.75%, the Bank of England Monetary Policy Committee announced today.
 
The decision to increase the base rate by a further 0.25% follows several recent quarter point rises.
 
The bank is seeking to control rising consumer borrowing – which now exceeds £1 trillion – and a booming housing market.
 
Some economists had expected the costs of borrowing to climb by 0.5%.

Speculation was fuelled by the fastest growth in manufacturing for a decade and a 3.7% increase in GDP for the three months to June.
 
Grant Phillips, marketing director for agriculture at Barclays Bank, said: “It‘s important to remember that interest rates are still at historically low levels.
 
“Agriculture‘s borrowings now stand at £11bn, but this is still manageable. Rising levels in farming income have given scope to service these levels of borrowing.”
 
George Cook, senior business consultant at Andersons, said the decision would add to the overall pressure on farm businesses with borrowings, especially if recent fuel price increases and pressure on commodity values were taken into account.
 
“That said, rates are still historically low, and for a lot of farm businesses finance charges are not the most critical cost centre to focus on,” he added.