Rising inflation could lead to more repossessions - Cable

12.09.12pm GMT Tue 16th Jan 2007

Liberal Democrat Shadow Chancellor, Vince Cable MP

Commenting on the announcement that inflation has hit 3%, Liberal Democrat Shadow Chancellor, Vince Cable MP said: "It is clear that inflation is much higher than the Bank of England believed a few months ago. Many people are feeling the pinch as the increased cost of living hits their pockets.

"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.

"It is inevitable that more families, who are affected by redundancies and up to their necks in debt, will fall into serious arrears leading to growing numbers of repossessions.

"We welcomed yesterday's move by the Government to extend independent financial advice, but this is too little too late. The Government must urgently enter into talks with the banks to ensure there is a code of conduct governing the way that mortgage lenders deal with arrears, so that rising interest rates do not lead to escalating numbers of repossessions.

"Very few people now believe the official measure of inflation. Far more people take note of RPIX or RPI, which much better reflect their own experience of price rises. RPIX is now at 3.8%, its highest since October 1992, while RPI is at 4.4% its highest since December 1991."