Interest rate rises dampening mood to spend

Interest rate rises dampening mood to spend according to Legal & General’s ‘Moneymood’ Survey.

Julia Clayworth, Wealth Management Customer Marketing Manager said: “The Bank of England Monetary Policy Committee has raised the interest rate five times since August, which is good news for savers.

So it’s hardly surprising that MoneyMood figures show we are in ‘save’ mode compared to three years ago. But clearly higher interest rates are not good news for borrowers and this is reflected in the fall in the mood to spend since August, which now stands at the lowest level for three years.

MoneyMood also found that the percentage of households who said they have money to spend after paying bills and debt payments has fallen to from 57 per cent from 61 per cent over the last 12 months.

That would suggest more households are finding themselves in a position where they are struggling to make ends meet compared to a year ago when rates were down at 4.5%. These findings reinforce the consensus view that the Bank of England should ‘take its time’ before raising rates again to measure the full impact of the latest rise.”