Money News: Homeowners warned: expect another rise in interest rates

Homeowners should brace themselves for a further hike in interest rates this year after a stark inflation warning from Mervyn King, Governor of the Bank of England.

Mr King said "inflation [was] likely to be volatile" and expressed his "great uncertainty about energy prices". These remarks were interpreted by financial markets and analysts as meaning that another rate rise - probably 0.25 percentage points - was needed sooner rather than later to keep the lid on the cost of living.

Many economists, in-cluding those at the invest-ment manager Investec, now predict another rate rise by November.

Mr King's comments came after last week's quarterly Inflation Report, which gives the Bank of England's assessment of the consumer price index and what it thinks needs to be done to keep it on track.

The Government demands that members of the Bank's Monetary Policy Committee aim for a 2 per cent inflation target - a low and stable level of growth. If inflation exceeds or undershoots this by more than one percentage point, the committee must write to the Chancellor of the Exchequer to explain what went wrong, and how it will correct matters.

For homeowners on variable mortgage rates, another rise in the cost of borrowing so quickly after last week's decision to raise the Bank base rate to 4.75 per cent would be an unwelcome expense (see Property, page 20). With personal insolvencies at record levels, there are concerns that Bank policy to curb inflation could push many already hard-pressed borrowers into great financial difficulty.

Millions of credit card borrowers could also be affected as lenders adjust their rates upwards to reflect the higher costs.

Motoring: Car repair charges 'extortionate'

Consumers are being charged at an "extortionate" rate of up to £170 an hour for garage car repairs.

In eight out of 10 parts of the UK surveyed in the annual Direct Garage Labour Rates review of 3,000 workshops, car owners were charged more than £100 an hour. The survey is conducted by Warranty Direct, a provider of personal warranties.

On average, motorists can expect to pay £72.30 for each hour a mechanic spends working on a car. Although the costs are high, up by as much as 10 per cent on last year depending on the location, labour rate rises "are starting to stabilise", said Warranty Direct's spokesman, Duncan McClure Fisher.

"Garage rates are still extortionate and it's obvious that there's still a major gulf between regions and between independent and franchised [repair centres]."

The average hourly rate at a franchised repair dealer is £91.07, compared with £49.61 at independents. The maximum hourly rate was found in London, where a franchised garage charged £170.61. The lowest was in Lanarkshire, where the charge was £32.12 per hour.

Earlier this year, the National Consumer Council suspended its "super-complaint" - where it asks the Office of Fair Trading to investigate - into the costs and practices of car servicing. It said the repairs industry had made significant progress in tightening codes in favour of consumers during the nine months since it announced the procedure.

Before taking a car in, motorists should always ask the hourly charge and compare it with rival workshops.

Identity theft: Young people at risk from fraudsters

Consumers aged from 18 to 29 are most at risk of falling victim to identity theft, a report warned.

Nearly a third of the under-30s have no idea that a gas or electricity bill can be used to steal an identity, said the research from npower.

"The under-30s show least restraint when it comes to sharing personal details," its report said.

"More than two-thirds of people in this age group have at some time given friends personal details, including cash card pin number, full bank account details, online bank log details and passwords."

Such information could easily fall into the possession of a third party, the report said.

"It is relatively easy for a thief to steal someone's identity and, with the under-30s... [ID theft] really isn't seen as important; they are blissfully unaware of the dangers," said Professor Martin Gill, an ID theft specialist and professor of criminology at the University of Leicester.

Nearly 140,000 people had their identity stolen last year, according to figures from Cifas, the lenders' anti-fraud association.

The nPower report came as the HSBC bank faced claims from researchers at the University of Cardiff that its online banking system was vulnerable to "key-logging", where crooks track strokes on a keyboard to uncover typed-in security codes.

The bank said it would review its procedures but that it wasn't aware any such fraud had been committed on its customer accounts. It remained confident in its security.

House prices: Property market buoyant

The average cost of a house in England and Wales is nearly £200,000, the Land Registry said last week.

Over the three months from 1 April to the end of June, the average price rose by 7.71 per cent on last year, to £199,184.

House price inflation was at its highest, 11 per cent, in the North and North-west.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Experienced Recruitment Consultant

    £20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

    Recruitment Genius: Collections Agent

    £14000 - £16000 per annum: Recruitment Genius: This company was established in...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

    Day In a Page

    Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

    Cameron lowered the flag for the dead king of Saudi Arabia...

    But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Humanity must be at the heart of politics, says Jeremy Corbyn
    Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

    Joe Biden's 'tease tour'

    Could the US Vice-President be testing the water for a presidential run?
    Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

    Britain's 24-hour culture

    With the 'leisured society' a distant dream we're working longer and less regular hours than ever
    Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

    The addictive nature of Diplomacy

    Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
    Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

    Fashion: Ooh, Lady Chatterley!

    Take inspiration from DH Lawrence's racy tome with equally racy underwear
    8 best children's clocks

    Tick-tock: 8 best children's clocks

    Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
    Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

    Charlie Austin: ‘If the move is not right, I’m not going’

    After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
    Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

    The Arab Spring reversed

    Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
    King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

    Academic claims King Arthur was real - and reveals where he lived

    Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
    Who is Oliver Bonas and how has he captured middle-class hearts?

    Who is Oliver Bonas?

    It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
    Earth has 'lost more than half its trees' since humans first started cutting them down

    Axe-wielding Man fells half the world’s trees – leaving us just 422 each

    However, the number of trees may be eight times higher than previously thought
    60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

    60 years of Scalextric

    Model cars are now stuffed with as much tech as real ones