Interest rates winners and losers

New analysis highlights towns most at risk from rising interest rates

A new report from Experian reveals that certain parts of Britain, including Hull, Slough and Stevenage, are suffering far more than other areas as a result of the continued rise in interest rates.

Neil Blake, Chief Economist at Experian Business Strategies said: ‘There are winners and losers when interest rates change. People with savings will gain and those with mortgages or large amounts of unsecured debt will lose out. However, our research shows that the winners and losers are heavily concentrated in some locations and in certain socio-economic groups.’

The UK-wide report takes into account a broad range of factors affecting individual wealth, such as gross incomes, taxation, interest payments, disposable incomes and consumer spending, and uses Experian’s postcode-based Mosaic consumer classification to identify the types of people and neighbourhoods most susceptible to debt and rising interest rates.

Local authority areas most resilient to the rise in rates include East Dorset, North Norfolk, Wealden, Rother and Chiltern, while the most vulnerable areas include Slough, Newham, Harlow, Barking and Dagenham, Blaenau Gwent, Stevenage and Hull.

According to Neil Blake, ‘The rise in interest rates is very bad news for places like Hull, which is already suffering from the floods after the wettest June since records began. Hull is joined by a number of other areas characterised by higher proportions of people with large mortgages, lower gross incomes, significant levels of unsecured borrowing and fewer savings.’

These neighbourhoods include Mosaic types Just Moving In, Fledgling Nurseries and Burdened Optimists – all with a high reliance on credit and often over-stretched on mortgage borrowing. In contrast, those likely to benefit most from rising interest rates include Greenbelt Guardians, Bungalow Retirement, High Spending Elders and Summer Playgrounds. Typically, these people are older, with high levels of savings and investments with very low mortgages and little or no use for credit.

Back