Consumers who have taken out a loan should not find their financial situation seriously affected by the 0.25 per cent base rate increase this week if they have planned for the long term, a debt expert has said.
A slight base rate rise is unlikely to have come as a shock, but consumers should prepare for the unexpected in their personal circumstances, Stephen Rose, director of the Debt Advice Bureau, commented.
Small interest rate rises "aren't in themselves a reason for why there's been such a rise in insolvencies", he explained.
"Rates would have to go a lot higher before that would filter through," he said, with concerns about meeting loan repayments largely secondary to wider personal financial management issues.
Simply by leaving themselves a larger margin of error, customers can ensure they are "better insulated" from debt difficulties, he said.
"If you want to guarantee nothing is going to go wrong – prepare for it," Mr Rose added.
Otherwise, "the one day you don't take the umbrella with you is the day it chucks it down", he warned.
Insolvency Service figures show there were 30,075 insolvencies in England and Wales in the first quarter of 2007, 23.9 per cent more than one year previously.
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