The Bank of England's monetary policy committee has frozen the base interest rate at 4.75% for the second successive month amid growing anticipation that it will most likely increase the rate in November.
Last week, Nationwide predicted a rate rise in November following an increase in house price inflation of 1.3% last month while Halifax said yesterday house prices rose 1% in September.
While both lenders expect house price inflation to ease in the run up to Christmas they say this is likely to be caused by higher utility bills and increasing interest rates rather than because of economic instability, higher jobless figures or a fall in consumer spending.
Nationwide also pointed out yesterday that consumer confidence had recovered from its recent fall over the summer suggesting the MPC’s decision to increase the base rate in August and then hold it at 4.75% in September had helped to take some of the heat out of economy.
That said, inflation is still running at 2.5% and much is likely to depend on the Bank’s next inflation report due out on 17 October.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
Despite improved risk appetite
FOS award limit increase
Relates to 136 million transaction reports
Ceremony will take place 13 November