fear of finance

Ken Clarke's interest rate increase, like the housemaid's baby, is only a small one, but it is definitely an increase, and in the nature of these things it is likely to be only the first of a family of rate rises over the next two years while the economy takes time to respond to the signal and slows down from what the Chancellor now sees as an unsustainable growth.

Recorded cases of a trend being reversed after just one move are rare indeed, and 7 per cent looks likely by the end of next year.

But unlike the housemaid, the Chancellor will expect to enhance his reputation for prudence, probity and putting duty before pleasure and political opportunism.

That will last at least until the Budget, when the cynics now believe he will use his new-found reputation for monetary rectitude to justify some fiscal laxity, in the shape of tax cuts which could not otherwise be delivered without risking a run on sterling. If he holds back on tax cuts now, he really will be a candidate for sainthood.

But credit where it is due. He has done a remarkable job in sustaining the recovery, which looked like faltering in 1994, without having to put rates up until now, but the Prime Minister has never been able to call the election on the back of the recovery and the Chancellor has finally been forced to concede an upturn in rates with the election still seven months away.

In the short run, the first rise in interest rates for two years is unlikely to have much immediate impact on personal borrowers or investors.

The link between base rates and borrowing and lending rates is not as immediate as it used to be. The big mortgage lenders have been quick to assure borrowers that they have no plans to raise their standard variable mortgage rates, and there have been few immediate changes in rates offered to investors.

The most immediate beneficiaries will be investors who have treasury accounts with merchant bankers Close Brothers.

The minimum investment is pounds 50,000 and the interest is automatically linked to rates in the London inter-bank market.

It pays out the bid rate, which is 0.125 per cent below the offer rate, but it is automatically reset each month and from yesterday the rate has jumped to 61/16 per cent.

Other changes are few and far between as our weekly table from MoneyFacts (left) confirms. But we have now entered a period of phoney war on interest rates.

Nothing dramatic is happening and this week's rise in rates alone is unlikely to kill the recovery in the housing market.

Demand for mortgages remains relatively low, if only because there is a shortage of houses for sale, but overall demand for credit is rising and competition for savings will certainly push rates up the next time base rates move.

They might not rise a full 50 basis points (0.5 per cent) next time, but some adjustments are inevitable next time bases rates go up.

Meanwhile with base rates set to be above current levels for two, maybe three more years, existing fixed rate mortgage offers up to the end of the century at least will look increasingly attractive.

These offers may be exhausted and replaced by progressively higher rates.

Clifford German

Best borrowing rates

Telephone % Rate and Max Fee Incentive Redemption period adv % penalty

MORTGAGES

Fixed rates

Scarborough BS 0800 590547 0.20 for 1 year 85 0.75% - 1st 5 yrs:7.04% of sum repaid

Newcastle BS 0191 244 2468 6.49 to 1/1/00 95 pounds 295 - To 1/1/03: 5% of advace

Northern Rock BS 0800 591500 7.24 to 1/1/02 95 pounds 295 - 1st 6 yrs: 5% of sum repaid

Variable rates

Scarborough BS 0800 590547 0.65% for 1 year 90 - - 1st 5 yrs:6.33% of sum repaid

Principality BS 01222 344188 3.50% to 1/11/98 75 - - To 30/10/01: discount reclmd

Northern Rock BS 0800 591500 4.24% to 1/1/00 95 Refund valn fee 1st 7 yrs: 5% of sum repaid

First time buyers fixed rates

Alliance & Leic BS via local branch 2.10 to 1/10/97 95 0.5% - To 1/10/01: 6 mths interst

Northern Rock BS 0800-591500 4.49 to 1/1/99 95 pounds 295 ___ 1st 6 yrs: 5% of sum repaid

Cheltenham & Glou 0800 272131 7.25 for 5 years 95 pounds 495 Free valuation 1st 6 yrs: 6 mths int

First time buyers variable rates

Principality BS 01222 344188 1.00 to 1/11/97 90 - - To 31/10/01: discount reclmd

Greenwich BS 0181 8588212 3.49% for 2 years 95 pounds 250 - 1st 5 yrs: discount reclaimed

Northern Rock BS 0800 591500 5.24% to 1/1/02 95 - Refund valn fee 1st 7 yrs: 5% of sum repaid

PERSONAL LOANS

Telephone APR % Max LTV Fixed monthly payments (pounds 3,000 over 3 years)

Unsecured With insurance Without insurance

Northern Rock BS 0345 421421 12.9H pounds 112.66 pounds 102.59

Direct Line 0141 2489966 13.9E pounds 112.86 pounds 101.33

Nationwide BS via local branch 14.9 pounds 113.15 pounds 102.49

Secured (second charge) Max LTV Advance Term

Clydesdale Bank 0800 240024 7.5 Neg pounds 3K - pounds 15K 6 mths to 25 years

Royal B of Scotland 0131 523 7023 8.7 70% pounds 2.5K-pounds 100K 3 years to retirement

Barclays Bank 0800 000929 9.3/9.6 80% pounds 10K-pounds 75K 5 to 25 years

OVERDRAFTS

Authorised Unauthorised

Telephone Account % pm APR % pm APR

Woolwich BS 0800 400900 Current 0.76 9.5 2.18 29.5

Alliance & Leicester 0500 959595 Alliance 0.76 9.5 2.20 29.8

Abbey National 0500 200500 Current 0.94 11.9 2.18 29.5

CREDIT CARDS

Telephone Card Type Min Rate APR Annual Int. free Income % pm % Fee period

Standard

Co-operative Bank 0800 109000 Advantage Visa - 0.64N 7.90N nil 0 days

Robert Fleming/S&P 0800 829024 MasterCard/Visa - 0.9167 11.50 nil 0 days

RBS Advanta 0800 077770 Visa - 0.94N 11.90N nil 56 days

Gold cards

Co-operative Bank 0345 212212 Visa pounds 20,000 0.50 10.50 pounds 120 46 days

RBS Advanta 0800 077770 Visa pounds 20,000 0.94N 11.90N nil 56 days

Royal B of Scotland 01702 362890 Visa pounds 20,000 1.05N 14.50N pounds 35 46 days

STORE CARDS

Telephone Payment by direct debit Payment by other methods % pm APR % pm APR

John Lewis via store 1.39 18.0 1.39 18.0

Marks and Spencer 01244 681681 1.87 24.8 1.97 26.3

Sears via store 1.94 25.9 2.20 29.8

Best savings rates

Telephone number

Account

Notice or term

Deposit

Rate %

Interest interval

INSTANT ACCESS

Portman BS 01202 292444 Instant Access Instant pounds 100 4.50 Year

Co-0perative Bank 0345 252000 Pathfinder Instant pounds 5,000 4.75 Month

Direct Line 0181 667 1121 Instant Savings Instant pounds 10,000 5.50 Year

Direct Line 0181 667 1121 Instant Savings Instant pounds 50,000 5.75 Year

INSTANT ACCESS POSTAL ACCOUNTS

Teachers' BS 01202 887171 Bullion Postal pounds 500 4.80 1/2 Year

Alliance & Leic BS 0645 228858 Instant Direct Postal pounds 5,000 5.40 Year

Bristol & West BS 0800 901109 Instant Acess Postal Postal pounds 10,000 5.85 Year

Bristol & West BS 0800 901109 Instant Acess Postal Postal pounds 25,000 6.05 Year

NOTICE ACCOUNTS & BONDS

Chelsea BS 0800.132351 POST-Tel 20 Day 20 day P pounds 5000 6.05 Year

Chelsea BS 0800 132351 POST-Tel 20 Day 20 day P pounds 25,000 6.30 Year

Cheltenham & Glouc 0800 717505 Direct 30 30 day P pounds 100 5.50 Year

National Counties BS 01372 747771 Direct 90 90 day pounds 50,000 6.50 Year

CHEQUE ACCOUNTS

Kleinwort Benson 01202 502404 HICA Instant pounds 2,500 5.00 Month

Halifax BS 01422 335333 Asset Reserve Instant pounds 10,000 4.00 Quarter

Chelsea BS 0800 717515 Classic Postal Instant pounds 10,000 4.35 Year

Chelsea BS 0800 717515 Classic Postal Instant pounds 25,000 4.65 Year

FIXED RATE BONDS

Birmingham Midshires 0645 720721 Fixed Rate Bond 1 Year pounds 5,000 6.30F Year

Yorkshire BS 0800 378836 Fixed RateBond 31/3/98 pounds 5,000 6.60F Maturity

Leeds & Holbeck BS 0113 225 7777 Fixed Rate Bond 2 Year pounds 1,000 6.85F Year

Coventry BS 0345 665522 Fixed Rate Bond 30/11/99 pounds 1,000 7.30F Year

FIRST TESSAS

Sun Banking Corp 01438 744505 Fixed Rate TESSA 5 years pounds 8,575 7.30F Year

NatWest Bank 0800 200400 Fixed Rate TESSA 5 years pounds 5,000 7.45F Year

Birmingham Midshires 0645 720721 5 years pounds 1,000 7.00 Year

Principality BS 01222 344188 5 years pounds 500 6.80 Year

FOLLOW-ON TESSAS

West Bromwich BS 0121 607 2415 Fixed Rate TESSA 5 years pounds 3,000 7.45F Year

NatWest Bank 0800 200 400 Fixed Rate TESSA 5 years pounds 5,000 7.45F Year

National Counties BS 01372 747771 5 years pounds 9,000 7.20 Year

Birmingham Midshires 0645 720721 Inflation Beater 5 years pounds 1,000 7.00 Year

GUARANTEED INCOME BONDS (net)

Premium Life 0800 838020 1 year pounds 10,000 5.05FN Year

Premium Life 0800 838020 2 year pounds 10,000 5.45FN Year

Pinnacle Insurance 0181 207 9007 3 years pounds 3,000 5.60FN Year

Pinnacle Insurance 0181 207 9007 4 years pounds 3,000 5.85FN Year

AIG Life (UK) 0181 680 7172 5 years pounds 50,000 6.15FN Year

OFFSHORE ACCOUNTS (gross)

N'castle Bank Gibraltar 00 350 76168 Nova Access Instant pounds 25,000 6.30 Year

Northern Rock Guern 01481 714600 Offshore 30 30 day pounds 25,000 6.35 Year

Derbyshire (IOM) Ltd 01624 663432 90 Day Notice 90 Day pounds 25,000 6.55 Year

Northern Rock, Guern 01481 714600 Millennium Bond 1/1/00 pounds 10,000 7.50F Year

NATIONAL SAVINGS ACCOUNTS (gross)

Investment Accounts 1 month pounds 20 4.75 Year

pounds 500 5.25 Year

pounds 25,000 5.50 Year

Income Bonds 3 months pounds 2,000 6.00 Month

pounds 25,000 6.25 Month

Capital Bond Series J 5 years pounds 100 6.65F Maturity

First Option Bonds 12 months pounds 1,000 6.00F Year

pounds 20,000 6.25F Year

Pensioner's G'teed Income Bond Series 3 5 year pounds 500 7.00F Month

NS Certificates (tax-free) 43rd issue 5 year pounds 100 5.35F Maturity

9th Index linked 5 year pounds 100 2.50+rpi Maturity

Children's Bond Issue H 5 year pounds 25 6.75F Maturity

Start your day with The Independent, sign up for daily news emails
Sport
footballHe started just four months ago
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Travel
Streets ahead: Venice
travelWhat's trending on your wishlist?
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search

Where to look for returns in 2015: What will happen to stock markets?

The coming year is expected to provide opportunities for patient investors

Pension mortgages: 'The advice I was given was wrong and now I face losing my home'

It's a tale of wrongdoing by financial professionals and buck-passing by the regulators. Simon Read talks to a man who took out a pension mortgage

Simon Read: The point of having protection insurance? The right cover can help reduce your financial concerns at a time of extreme worry

In May Nicola Groves got a massive shock. The 45-year-old mother of two was told, bluntly, that she had breast cancer. "When I heard the words, 'You do have breast cancer and you are going to lose your breast', I felt as if time stood still," she says.

Mark Dampier: Maybe boom, maybe bust, but we'll probably just muddle along

It's that time again when the media looks back over the past year and forward to the next. I am reminded of an old film, The Day the Earth Caught Fire (1961). Near the end of the film a newspaper prints two headlines – which one it uses will depend on whether the world is saved or doomed.

Sainsbury’s sank 7 per cent to 234p; Tesco fell 3.2 per cent to 180.2p ; and Morrisons dropped 5 per cent to 159.9p

Money Insider: Supermarkets: the real challenger banks

The supermarket banks have always excelled at offering simple, no nonsense products, and savings accounts is another area in which they fare well

Pat and Richard Astbury at their home in Norton Canes, Staffordshire. They have benefitted from the Community Energy Project aimed at helping council tenants with their energy bills. They have had solar panels installed.

Locals in Staffordshire to save hundreds after new council-backed project to install solar panels

The sun is shining on people who struggle to heat their homes and it’s thanks to a sense of community

Gross household debt reached a historic high of around 160 per cent of combined incomes in 2007

Simon Read: Give people struggling with debt some breathing space

Struggling people need help, understanding and forbearance, not ill-thought-out pronouncements

A person walks through the City of London during the early morning rush hour in London

Simon Read: Caught up in the scandal about leaks at the regulator

You won’t find me bashing the banks for the sake of it, but sadly they’ve deserved all the criticism that’s been sent their way in recent years

There were around 750,000 victims of mobile phone theft in England and Wales last year, according to official figures

Money alert: Stolen mobile phones

Gillian Guy, chief executive of Citizens Advice: 'The injustice of shock bills for crime victims must end. The Government must stand up for consumers and cap bills from lost or stolen phones at £50'

Indian workers boil sugarcane juice to make jaggery, a traditional cane sugar, at a jaggery plant in Muradnagar, Uttar Pradesh's Ghaziabad district

Mark Dampier: A hot investment story is taking shape as India lets the light in

Stirring the pot: the Indian Government’s reforms of labour rules offer hope of a brighter future for businesses 

An AA patrol man helping a woman whose scooter had broken down.

Bargain hunter: Whisk up those leftovers instead of just throwing them in the bin

Knight of the road, look out: you’ve got a new rival 

How to raise money for charity this Christmas

There are so many ways you can raise money - and awareness - for charity. Rob Griffin explains how easy it is to donate and reap financial rewards

Simon Read: The Chancellor has stamped on an unfair tax. But will the delight of homebuyers mean misery for others?

Were you surprised by the sudden reform of the rules for stamp duty on property purchases? I certainly was. I've been calling for ages for a change in the tax to make it more fair – and, at a stroke, George Osborne did just that on Wednesday in his Autumn Statement.

Santander, whose ads have been fronted by the Olympic gold medallist Jessica Ennis-Hill, was among the banks where there were potential pitfalls with shared licences

Best savings rates are not all they might seem

Consumers can sometimes think they are shopping around for a rewarding account when in one important aspect, writes Samantha Downes, they are not
The sunlit uplands: switching out of a final salary pension may seem like madness, but there could be cases where it makes sense

Gold-plated pensions – the key to retirement freedom?

With some people are weighing up whether they will be better off cashing in their final salary pension next spring, Samantha Downes asks the experts

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

    Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

    Selby Jennings: Quantitative Research | Equity | New York

    Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

    Selby Jennings: SVP Model Validation

    Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

    Selby Jennings: Oil Operations

    Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

    Day In a Page

    Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

    Aren’t you glad you didn’t say that?

    The worst wince-and-look-away quotes of the year
    Hollande's vanity project is on a high-speed track to the middle of nowhere

    Vanity project on a high-speed track to nowhere

    France’s TGV network has become mired in controversy
    Sports Quiz of the Year

    Sports Quiz of the Year

    So, how closely were you paying attention during 2014?
    Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

    Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

    From Armstrong and Miller to Pointless
    Sanchez helps Gunners hold on after Giroud's moment of madness

    Sanchez helps Gunners hold on

    Olivier Giroud's moment of madness nearly costs them
    A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

    Christmas without hope

    Gaza fears grow that conflict with Israel will soon reignite
    After 150 years, you can finally visit the grisliest museum in the country

    The 'Black Museum'

    After 150 years, you can finally visit Britain's grisliest museum
    No ho-ho-hos with Nick Frost's badass Santa

    No ho-ho-hos with Nick Frost's badass Santa

    Doctor Who Christmas Special TV review
    Chilly Christmas: Swimmers take festive dip for charity

    Chilly Christmas

    Swimmers dive into freezing British waters for charity
    Veterans' hostel 'overwhelmed by kindness' for festive dinner

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

    'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

    Yazidi girls killing themselves to escape rape and imprisonment
    Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

    Ed Balls interview

    'If I think about the deficit when I'm playing the piano, it all goes wrong'
    He's behind you, dude!

    US stars in UK panto

    From David Hasselhoff to Jerry Hall
    Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

    Grace Dent's Christmas Quiz

    What are you – a festive curmudgeon or top of the tree?
    Nasa planning to build cloud cities in airships above Venus

    Nasa planning to build cloud cities in airships above Venus

    Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect