Are rates set for a hike

Are Rates Set For A Hike?

Interest rates will rise by the end of 2006, economists are predicting.

Leading economists are speculating that that the Bank of England will announce a one quarter point rise in the basic cost of borrowing, of interest to those seeking a mortgage or loan, before the end of the year.

While the monetary policy committee (MPC) voted recently to hold interest rates for the 11th consecutive month, many economists are claiming that economic pressures, notably rising inflation, will force a rate hike in the medium term.

Milan Khatri, chief economist at the Royal Institution of Chartered Surveyors (Rics), said: Rics expects the Bank of England to follow the lead of other world central banks, and raise interest rates later this year by a quarter of one per cent.

With a rise seeming probable in the coming months, many fixed-rate mortgage providers have pre-emptively upped their rates in anticipation, while wider market pressures have already seen fixed rate mortgages become more expensive over the past year.



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