Predicted hike in interest rate causes concern

Small businesses in and around Bournemouth will be adversely affected if there is another interest rate hike as forecasted by economists.

Global Insight chief UK and European economist Howard Archer has predicted another rise in interest rates owing it to Britain’s economic growth in recent times.

However, this is cause of concern for mortgage holders and small business owners all over the country and so much more in Bournemouth.

“Bournemouth attracts many small businessmen and being a tourist place this can adversely affect many,” says Mr. Timothy Bacon, owner of The Cuckoo Inn near the new forest area.

“It is a headache if it increases again,” he says adding that most people who hold mortgages and loans stop spending as much when interest rates go up which in turn has a toll on his business.

The Bank of England’s decision to increase interest rates by 0.25 per cent to 5.25 per cent earlier this month was a verdict that had investors smiling but most borrowers were unhappy.

Statistics reveal that the Gross Domestic Product (GDP) grew by an estimated 2.7 per cent last year after unexpected output during the last few months.

According to Mr. Archer this has given rise to inflation and this can be only curbed again with another interest-rate hike.

However, Mr. Bacon, who now owns four pubs in the area, says: “It is only in theory that interest rate hike curbs inflation. In real, it leads to a price hike and people’s spending power is less especially that of borrowers.”

Srikanth Ranganathan, who owns a news agency in Springbourne, Bournemouth says: “I have a loan from the bank as well and I can’t think of how to deal with another interest rate hike if it happens. I hope it won’t.”

On the other hand, Cheryl Laurie an employee at Llyods TSB in Bournemouth and a regular investor says: “I save regularly and my flat is rented not on a mortgage so it sounds good to me.”

While the very suggestion of another interest rate raise has aroused concern among people, an actual hike might even do worse as Mr. Bacon said, “I hope its one of those forecasts that doesn’t materialize."

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Barratt blocks Boscombe sea view

Residents at Boscombe Seafront are unhappy about a Barratt Homes construction that will block their ‘priceless’ sea-view.

Honeycombe Beach, a residential development undertaken by Barratt Homes a national housing development group will soon come up by the Boscombe seafront obstruction the sea-view of the existing buildings that face the ocean.

Honeycombe Beach has been planned to attract new residents to the area and it will built on the place where there now stands a parking lot.

A local resident, who didn’t want to be named, said: “The authorities were well aware of our feelings. My flat faces the ocean and the parking lot and when this thing comes up what’s the point in having a house here. I don’t want to go to my window and look at other people’s houses.”

She adds that a formal protest that was launched was

Andrew Emery, Seafront Service Officer said: “We had to sell the parking lot by the sea to raise money for the artificial reef which is a part of our plan for the new look Boscombe will get. It is for the larger good and I’m sure those who are upset will be fine once the new look sets in.”

“There’s always going to be one or two protagonists and we can’t please everyone,” adds Chris Saunders, the Seafront development manager pointing out that a new residential area only means a hike in local business and economy.

Barratt homes held an Open day on Saturday, January 27 in the Chines Hotel on Boscombe Spa road to showcase their flats in Honeycombe Beach which is now open for sale.

The open day welcomed a crowd of potential residents but those in authority at Barratt Homes were unavailable to comment on the woes of the existing residents.