David Prosser: Another reason to hold interest rate rises

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Outlook The Bank of England's latest credit conditions survey suggests that the increase in mortgage defaults seen during the first three months of the year was "unexpected". It should not have been. For while interest rates remain exceptionally low, we know that unemployment has been rising and that even for those families whose income has not been reduced by the loss of a job, the rising cost of living has squeezed their finances.

This is yet another compelling reason for the Bank's Monetary Policy Committee to delay increasing the cost of borrowing. May, which has previously seemed the most obvious month for rates to begin rising, now looks far too soon. Unemployment and inflation (the cost of living) almost certainly have further yet to rise. Even a small interest rate increase could see mortgage default rates deteriorate significantly.