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Why interest rates are likely to rise in 2004

The era of low rate personal loans may be drawing to a close, because economists and politicians are worried that too many UK consumers are borrowing too much money. Last year's small interest rate hike was a warning shot – expect more rises in 2004.

We've never had it so good: last year, the cost of borrowing was lower than it's been for almost fifty years. However, the era of low rate personal loans may be drawing to a close, with most financial experts predicting that interest rates will rise during 2004.
Low rate personal loans are good for consumers, but they can be bad for the economy: if people borrow too much, sooner or later they can get into trouble – which means that the economy can hit the skids. For example if house prices rise too quickly, sooner or later there's a crash which can cause financial misery for homeowners. The Bank of England uses interest rates to stop this from happening: if borrowing is more expensive, people cut their spending.
Experts believe that last year's interest rate hike was a warning shot: we're still spending too much, the numbers of people getting into financial trouble is increasing, and as a result the Bank of England is likely to raise interest rates again in 2004. helps you find the best loans companies for your specific needs, and gives you background information on the various types of loans available in our loans articles, more loans articles and still more loans articles.

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