Debt Alert - Bank of Portugal

Bank of Portugal issues financial alert as families start to feel the credit pinch debt alert. Families need to brace themselves for the tough economic times that lie ahead, the Bank of Portugal predicts. In its 2006 Finantial Stability Report, the Bank forecasts that thousands of families who previously enjoyed relative finantial stability will now struggle to rapay their debts. This warning follows a decision last week by the European Central Bank to raise interest rates by 25 basis points to a figure of four percent. According to analysts, the ECB rate is set to climb to a figure closer to five percent before the year is out with consensus being that a rate of at least 4.5 percent will be in force within the next five months.