The current rate rising cycle is nearing an end as inflation is expected to remain within or close t...
The current rate rising cycle is nearing an end as inflation is expected to remain within or close to the Bank of England's target of 2%, according to Kris Gozra, head of treasury for The Derbyshire Building Society.
UK retail sales, particularly over the key Christmas period, were below expectations and wage price inflationary pressures remain low.
Gozra said: "In the markets, interest rates have risen recently in anticipation of a further rate rise."
However, this is as far as it goes for this cycle, according to Gozra.
He said: "While we believe this is a short-term blip, in the long term, the key drivers for a move in UK base rates remain concerns over inflation and its relationship to house prices and consumer borrowing.
"All the data available so far suggests the UK housing market is cooling but not heading for any pronounced slump.
"We believe rates may peak at their current level or at worst 5%, with a possible 0.25% rise during the summer months not being ruled out. Overall, however, we expect rates to remain broadly stable throughout 2005.
"Providing there are no shocks to the financial system and rates maintain these levels, we expect the UK housing market to continue to cool and achieve the anticipated soft landing."
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