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Energy firms `not refunding overpayments automatically` Average household £7 a week richer but debt levels remain high Consumers `cutting back on credit card debt` Mortgage debt often greater than house value Household energy bills `could top £4,700 a year by 2020` Many over 50s `facing financial difficulties` CML lowers repossession prediction Higher electricity prices will pay for carbon capture Unemployment set to rise Inflation speculation `greatly exaggerated` Unemployment reaches 12-year high UK recovery `to start in 2010` People `may be risking finances due to lack of pension savings` Economy `may be bottoming out` Fuel poverty still putting billpayers at risk of debt More than 20% using savings to `pay down` debt Housing market - buyer interest is up ISA rate cuts could raise debt risk Online retail sales to grow Consumers take up gardening to avoid debt

Financial gloom may encourage rate cut

03/10/2008

A recent survey of manufacturers may make a cut in the Bank of England’s base rate more likely, the Financial Times reports.

Measuring output reported by purchasing managers, the Chartered Institute of Purchasing and Supply/Markit report on manufacturing returned a reading of 41 for September, its lowest reading since the survey began in January 1992.

Down from 45.3 in August, this ‘represents a marked shift to pessimism and falling sales’, according to the Financial Times.

Increasing economic gloom may encourage the Bank of England to lower its base rate in a bid to stimulate the economy – something which may interest borrowers thinking of consolidating their debts.

Since the interest rates on various kinds of debt (from mortgages to debt consolidation loans) can be linked to the base rate, any rate cut by the Bank of England could help people in debt, reducing both the amount they pay on some of their existing debts and the cost of a potential debt consolidation loan.

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