Interest rates increased to four per cent
www.moneynews.co.uk > Housing market > Interest rates increased to four per cent
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Money News |
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Interest rates increased to four per cent
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Analysts had predicted that interest rates would rise a quarter per cent to four per cent this month following strong signs of economic recovery, growing consumer debt and the booming housing market.
The Bank's Monetary Policy Committee is wary of letting house price inflation and consumers borrowing continue unchecked.
The Halifax revealed yesterday the average cost of a first home had broken through the £100,000 barrier.
The Treasury has backed an interest rate rise, as it believes it is important to act fast to stop the economy overheating.
Ed Balls, the chief economic adviser to Gordon Brown, commented ahead of the interest rate decision: "Having been the only economy to avoid recession, our challenge now is to entrench stability for the long term. It is precisely at this stage of the economic and electoral cycle that past British governments have resorted to short-termism. We will not repeat those mistakes.
"There is now a consensus - across both industry and the regions - that a forward-looking and pre-emptive approach to monetary policy, backed by a sound fiscal policy, is the best way to lock in stability and deliver balanced regional growth."
Some analysts predict interest rates could rise to five per cent by late 2005.
Related News : Housing market |
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