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Rate rises are hard to swallow

Banks and building societies will start hitting homeowners with rises in mortgage rates as early as March. Those on standard variable rates will bear the brunt while those on tracker mortgages will have to hope the European Central Bank (ECB) delays any increases for as long as possible.

News of an imminent increase came on the same day that the Government appeared to concede that an inquiry into the causes of the near-collapse of the banking system is now warranted.

The two issues are as apposite as they are antagonising for the tens of thousands of customers who will feel they, either as mortgage or taxpayers, are now taking the full impact for the folly of others.

It is a bitter pill for many who now find themselves paying through the nose on so many fronts while coping with the shocking reality of being trapped in deepening negative equity.

The hard part for so many to grasp is how it has all come to this and why it is their money that is now being used to bail out the profligate.

Even harder, perhaps, is coming to terms with the fact that, whatever the overall issue, we have to get the commercial life of the country going again. And that requires the sort of sacrifices now being foisted on ordinary workers.

Restoring confidence in our banking system is going to be a sore and searching quest but on doing so successfully rests all our futures.

There is no escaping that, even if it provides little solace as we face into what now looks like an inevitable upward trend in interest rates right across the board before the end of the summer.

But banks should not be let lose sight of the fact that they too need to be circumspect in the manner and extent of their interest rate increases.