Wednesday, 25 November 2009

New report highlights 'flawed' evidence base of Government policy on rate caps

A new report from the New Economic Foundation has revealed that Government's previous decision in 2006 not to implement a rate cap was based on 'flawed' evidence. The report, Doorstep Robbery, reveals that a prior DTI funded study of interest rate caps in other countries ('the Policis Report') failed to meet even basic standards of social research. It also indicates that poor people in the UK are more likely to be financially excluded than in France and Germany as well as paying a much higher price for credit.

The NEF report calls on Government to introduce a cap on the total charge for credit and for banks to be obliged to meet the needs of low income households for affordable credit either directly through the provision of overdraft credit or in partnership with credit unions.

The full report can be downloaded from and is being launched tonight at the London Citizens Meeting in the Barbican Centre, which will see 2,000 people call for a cap on interest rates at 20% of the total charge for credit - see

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