Referendum voters sceptical of interest rate rise
How could Brexit affect the interest rate rise?
39% of Brits believe Brexit would have no impact on interest rates, despite warnings from the ‘In’ campaign that interest rate rises could follow if the UK leaves the EU, according to research released today by free credit scoring service, ClearScore.
Among those intending to vote ‘Leave’, the figure is even higher, with 54% believing interest rates would be unaffected and just 27% believing they will go up. In contrast, a whopping 71% of remain voters think rates will go up.
When it comes to those undecided on which way to vote, 61% say interest rates are a key consideration in which way they will eventually vote, but most don’t think interest rates will be affected (42%) or will fall (18%) and just 41% think they’ll go up.
The Governor of the Bank of England, Mark Carney, has previously indicated that a decision to leave the EU may mean interest rates would have to rise more quickly, increasing the amount Brits pay for their credit such as mortgages, loans and credit cards.
A 2% increase in interest rates would leave a family with a £100,000 mortgage more than £100 worse off a month. When asked how they’d cope with this, half (50%) said they’d need to reduce monthly expenditure; nearly a third (32%) would be forced to put off expensive purchases such as a house or car; over one in five (21%) would try to work longer hours and 11% would actively try to increase their credit score to get the best deals on credit.
Justin Basini, founder and CEO of ClearScore, said, “No one can predict the exact impact of Brexit itself on interest rates, but they are certain to go up at some point. That means people need to plan for rate rises, no matter what the outcome of the referendum. Personal debt levels are at record levels, so thinking about ways to reduce spending now, as well as making sure you’re not overpaying for credit will help reduce any financial pain when rate rises do kick in.”