Rate rise on the cards

17 March 2004
Minutes from this month's interest rate meeting by the Bank of England suggest an increase is likely in the near future.

All nine members of the interest rate setting Monitory Policy Committee voted for a rates freeze, but details of what was said suggest that for some members the decision was "finely balanced".

Minutes stated: "To raise the repo rate at this month's meeting would be a surprise, which might prompt an unwarranted re-evaluation of the committee's strategy by market participants and might as a result generate further upward pressure on sterling."

But some members raised concerns that continuous house price strength and debt levels meant the need for a rise was increasing and that by delaying a rise now could lead to an ever bigger one later on.

A rate rise could see mortgage contributions rise for all consumers without a fixed rate deal.

Since the meeting, on the first Thursday of the month, some economic indicators have pointed away from a rates rise.

Recent below target inflation figures might mean rates stay on hold for another month or two.