Arrears will rise with rates, warns BoE

Carney thoughtful
By Tom Porter
08 Dec 2014

The Bank of England has warned that raising interest rates from their record low of 0.5% could increase the number of UK mortgage borrowers at risk of falling into arrears by a third, as stagnant incomes remain a key concern for the UK economy.

In its latest quarterly report, published on Monday, the central bank said there is evidence that the proportion of mortgagors in arrears increases sharply when mortgage repayments exceed 40% of gross income.

The interest rate is likely to rise in a “gradual and limited” way, alongside increases in ...

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