Time to get biblical: the day of debt reckoning is nigh

Last Thursday, Cantor Index offered 9-1 against interest rates going up. A £450 bet on those odds and I could have paid off my overdraft. But not the unsecured loan. Or the credit card.

Time for Plan B: remortgage, release some equity and put off the dreadful day of reckoning. As a member of the Latter Day Church of Born Again Evangelical Atheists, I hate to get biblical. But reckoning there will surely be.

Last week's Bank of England Monetary Policy Committee rate rise caught the City on the hoof. For homeowners and those in debt - ie, almost everybody - the news went down like an overdue tax demand.

But the Bank had no choice. Its overriding objective is to ensure inflation remains under 2 per cent. The consumer price index is 2.5 per cent - significantly over the MPC's target. So better now a quarter point interest rate hike to 4.75 per cent to ward off inflation and slow down growth.

After spiralling petrol prices, energy bills, council tax and now food prices, higher mortgage and debt repayments will choke the short-lived consumer uplift.

For consumers, it's going to get a lot worse. Against mighty inflationary pressure, average wage rises have been restrained at 3.8 per cent, kept in check by the exploitation of dirt-cheap Eastern European migrant labour.

Gordon Brown's gift to the nation of economic stability comes with small print - a debt crisis that still has to unwind, underpinned by ever-rising house prices.

But the nagging uptick in unemployment, currently 1.64 million and rising, will lead to more and more repossessions. For now, housing market demand exceeds supply. Prices are rising by 8 per cent annually. Whether the market can withstand a further interest rate hike is a tight call.

Beat-up Jag for sale - one useless owner

This time next year Jaguar, the classic British car firm, will almost certainly have a new owner - and the future could be very bleak for 2,400 car workers on Merseyside. There is growing speculation that Hyundai, the Korean car firm, will mount a bid for the UK company owned by beleaguered US car giant Ford. The Koreans have no manufacturing presence in the UK and Jaguar would be a fantastic fit for the firm, eager to break into the US market.

Ford made a serious error buying Jaguar in 1989. It also overpaid. The $2.6bn (£1.38bn) always looked too high a price as Jaguar never made money: a scenario made worse by the inexorable rise of BMW - a direct competitor - whose designs and profits, in contrast to Jaguar, go from strength to strength.

Now it is more vulnerable than any other part of Ford's Premier Automotive Group (PAG), a division that includes marques such as Volvo, Aston Martin and Land-Rover.

Ford has cut its UK presence to the bone. After Dagenham closing in 2000, last year it shut a Coventry plant with the loss of 2,000 jobs. There will be more bad news as the US car giant battles to stem horrendous losses.

The lesson from Jaguar is that you cannot rely on brand loyalty. Without a classic design you're sunk.

Get the design right - possibly reduce volume and definitely improve quality - and there is no reason why an iconic British brand cannot reclaim the mantle it has lost to BMW.

Sounds like a job for Jon Moulton, the Alchemy Venture tycoon who went through the mill when he tried to buy Rover five years ago. Moulton was defeated by the Phoenix Four, who promptly milked Rover for all it was worth, for their own gain. He must be itching to enter the fray again.

Banks hooked on their clients' credit addiction

Acting in the best interests of shareholders is obviously a bank's primary responsibility. To banks this appears to mean maximising profits. Lending untenable amounts of cash to strapped consumers is one of the best ways to do this.

But responsibility to shareholders does not necessarily equate to doling out the readies to those without the means to pay it back. As they make record-breaking profits, the British banks are walking a very fine line indeed.

Regulation is on the agenda unless they show more guile in their lending criteria. So this may not be the best time to talk about the end of free banking, as HSBC did last Monday - especially as the banking sector makes more profit per customer - £75 - than any other sector. The temptation at the Treasury to levy a windfall tax must be almost unbearable.

Madge needs to clear her congested mind

Madonna, you've gone too far this time. It's not charging a minimum £80 a ticket that gets my goat. Nor the dubious pleasure of listening to your brand of pop lightened by a little bit of slap 'n' tickle. Rather it is your demand to your Wembley audience last Tuesday to man the barricades. Madonna joked it was great to be back in Britain - now her home. There was so much she missed about the place. Her house, her horse, but not the congestion charge.

Madonna hates Ken Livingstone's congestion charge. She has refused to give Transport for London her address, which would entitle her to the 90 per cent discount for residents of the charge zone. She claims this is an invasion of her privacy. But her disdain for the bravest initiative any politician has introduced in decades is maddeningly wrong-headed. Without it London would grind to a halt. With it, Livingstone can borrow money to fund new train lines and buses.

She told her audience 'We've got to sort out this congestion charge.' Damn right. It's got to go west. And Madonna should too, if she doesn't like London's laws.