Should interest charges be regulated?

As we mentioned earlier this week, the UK government is looking at ways of capping UK interest rates in relation to credit cards and loan companies. This is as a consequence of the ever-growing number of people falling into financial difficulties and unable to cover their interest rate charges let alone repay their capital. This has left literally millions of people in the UK dependent upon a small number of lenders, unable to refinance their loans due to their reduced credit rating and perceived financial risk.

As we mentioned in one of our earlier articles, if the UK government does push ahead with plans to regulate credit card interest rates and other loan facilities where will it all end?

Very soon the UK financial arena, one of the strongest in the world, will be in the vice like grip of regulators who in the current economic climate would prefer to challenge those companies charging high interest rates. There is no doubt that nobody would disagree with this idea in principle but in reality would this change the economic and financial environment in the UK forever and would UK businesses and UK consumers be at the beck and call of the UK government?