Public sees more rate rises

Consumers are expecting interest rates to continue to rise, according to a new survey commissioned by the Bank of England.

15:02 18 June 2004

Consumers are expecting interest rates to continue to rise, according to a new survey commissioned by the Bank of England.

The study, conducted by NOP, found that 69 per cent of the 1,974 questioned were expecting higher rates, compared to 66 per cent in February.

The Bank of England has gradually increased interest rates since November and this month it rose to 4.5 per cent. Governor Mervyn King has warned house buyers to be aware that further rate increases are expected, adding:

"Anyone entering or moving within the housing market should consider carefully the possible future paths of both house prices and interest rates."

Analysts are predicating that the cost of borrowing is likely to increase in order to control inflation. The Bank of England recently revealed that projected inflation is likely to rise above its target of two per cent in the next two years.