Analysts tip interest rate freeze
05 July 2004
The Bank of England is likely to leave interest rates on hold this month, after raising them in June.
Last month's quarter point rise in the cost of borrowing was the second in a row, and analysts are predicting this month that the Bank's Monetary Policy Committee will opt to leave interest rates unchanged at 4.5 per cent.
Forty-five of 46 analysts polled by Reuters news agency forecast that the Bank would keep interest rates on hold, but most experts are still predicting a further quarter point rise in August.
Housing prices and consumer spending are showing some signs of slowing, but both sectors are still booming and the Bank is keen to slow down soaring debt levels in the UK.
Bank of England governor Mervyn King has repeatedly warned that the housing market needs to cool down if a crash in house prices is to be prevented.
Growth in unsecured personal lending increased significantly in May and the Bank is becoming increasingly concerned about the possible effects of rising interest rates on heavily indebted consumers.