Rate rises 'yet to take full effect'

James Foster, strategic bond fund manager at Artemis, says it can take up to two years for interest rates to hit consumer spending. And Foster says the Monetary Policy Committee is “sufficiently hawkish” to introduce another rise, probably in July, and a further move in the Autumn up to 6%. As consumer debt levels are so high, Foster believes the full effects of the rate increases will be very tough. “Consumer debt levels are off the scale,” he says. “They are more than twice the level that they were in 1988, when a series of interest rate rises prompted a housing crash. “What highe...