Rising Inflation Could Lead To More Reposessions

January 16, 2007 4:46 PM

Commenting on the announcement that inflation has hit 3%, Jenny Willott MP said:

"With rising inflation combined with growing unemployment, there is a very real danger that more vulnerable Welsh families will get into serious debt and be unable to make mortgage payments. Unless urgent action is taken, this could quickly lead to more homes being repossessed.

"It is clear that inflation is much higher than the Bank of England believed a few months ago. Many people are feeling the pinch at the increased cost of living and rising house prices with personal debt levels soaring in recent years.

"There is now a real worry that interest rates will rise even further this year, as the Bank of England tries to tackle inflation. Alarmingly, this is at a time when unemployment is also rising.

"The Welsh Liberal Democrats welcomed yesterday's move by the Government to extend independent financial advice. But this is far too little far too late.

"The Government must urgently talk to the banks to ensure that mortgage lenders deal with arrears in a fair and decent way, without leading to escalating numbers of repossessions."

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