BoE rates rise expected

Posted: 27 Jun 2007 11:14:12 GMT

The Bank of England (BoE) looks likely to raise interest rates next week, following comments made by the deputy governor.

The Bank of England (BoE) looks likely to raise interest rates next week, following comments made by the deputy governor.

Speaking in Guilford yesterday, Sir John Gieve said that he was one of the four members of the monetary policy committee (MPC) to vote for a further rates rise earlier this month, although the majority of five chose to hold rates at 5.5 per cent.

"I voted for a further increase earlier this month partly because I was not convinced that current rates would be sufficient to bring credit growth and nominal demand back to their long-term sustainable path," he said.

Sir John's remarks will further convince many analysts that the MPC will raise interest rates next week, when the next decision is due.

This could spell problems for financially-stretched first-time buyers or even current homeowners on variable-rate mortgages, who will need to spend even more on their housing costs.


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