An interest rate rise may put thousands at risk of mental health problems
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Christopher Boyce, University of Stirling
After nine years of interest rates below 1%, it seems that the Bank of England will announce a rise before long. As pay growth picks up and inflation hits its 2% target, a rate rise would – it is argued – ward off potential risks of inflation in the medium term.
But another factor to bear in mind is that a rate rise could also have serious repercussions for people’s mental health. A large portion of the UK population have high, possibly unsustainable, levels of debt and a higher interest rate is likely to increase the burden of repaying some of that debt. It will therefore likely increase their levels of mental distress.
In recent research that colleagues and I published in the Journal of Affective Disorders, we explored how Bank of England interest rate changes from 1995 to 2008 influenced people’s mental health. What we found is that for each 1% increase in interest rates, there was a 2.6% increase in the incidence of mental health issue...
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