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Mortgage increases on the cards
The Bank of England may raise interest rates for the fourth time since November, according to a new study.
12:35 07 June 2004
The Bank of England may raise interest rates for the fourth time since November, according to a new study.
The survey of 43 economists by Bloomberg found that 24 of the respondents predicted a quarter-point increase to 4.5 per cent when the Bank of England Monetary Policy Committee meets on Thursday.
Any rise in interest rates by the Bank will see costs rise for all people without a fixed rate mortgage.
The UK housing market continues to boom, deterring first-time buyers from entering the property market, while consumer debt in the UK has reached record levels and shows little sign of slowing down.
Of the experts surveyed, the majority forecast an increase either in July or August, following rate rises in November, February and May. Bank of England governor Mervyn King warned last month that interest rates may need to increase faster than economists had forecast.
Adam Chester, chief economist at HBOS said: "Household borrowing and house prices continue to rise at unsustainably high rates. Spending remains firm, the global economy is picking up momentum, and there are incipient signs of inflationary pressure."
A number of figures and surveys released last week indicated that economic growth and inflation are picking up and economists have started to adjust their interest rate predictions in line with the latest information. Many believe this week's interest rate decision will be a very close call.
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