Sentance: base rate could reach 2% next year

Bank of England Monetary Policy Committee (MPC) member Andrew Sentance says that the base rate could reach "somewhere around about 2%" in 2012.

Speaking to Sky News, he also hinted that he voted for a 0.5 percentage point rise once again in this month`s MPC meeting to decide the base rate, saying: "I have argued in public that half a percent interest rate rise is justified and I still think that that`s the case."

Many economists have been expecting a base rate increase for several months now. The MPC last week voted to hold the rate at 0.5% for the 25th month, but the general consensus appears to be that there will now be a 0.25 percentage point increase within a few months.

When the base rate does rise, it will lead to higher mortgage payments for homeowners on tracker mortgages, potentially leaving some unable to keep up with all their commitments.

An expert at debt management company Gregory Pennington said: "A lot of homeowners will be worried about a potential increase in their outgoings, and for them the best thing to do is act now and make sure they are prepared.

"This might include saving more or budgeting carefully. Those who feel unable to do this, or feel they would struggle, should seek advice from an expert."



Gregory Pennington offer debt advice and debt management plans, as well as a range of other debt solutions. If you are worried about debt, contact one of our expert debt advisers now.