Spenders shrug off rate rise risk

NEARLY two-thirds of consumers believe an increase in interest rates this week would have no impact on their household finances, according to a new survey.

The findings of the poll from online bank Egg will be deeply worrying for the Bank of England which hopes to rein in rampant consumer borrowing by tightening monetary policy. Some 64% of the 1,005 people quizzed said a rise in the cost of borrowing would make no difference.

Homeowners with a £100,000 repayment mortgage would typically see their monthly bill increase by £15 if the Bank's monetary policy committee raises rates by a quarter-point to 4.25% on Thursday.

Consumers are similarly sanguine about their debts. Some 84% said they were comfortable with their level of unsecured debt, while 92% are happy with the amount owing on their mortgage.