Bank 'considers' further interest rate rise

17-May-2007

In news which may be of interest to first time home buyers, the Bank of England's monetary policy committee is considering a further rise in interest rates.

Following the publication of the Bank's report on inflation, it has emerged that a further interest rate increase would be needed to return inflation near to two per cent, which may worry first time home buyers concerned about affordability.

"The Bank of England is going to have to take interest rates to six percent," said James Carrick, an investment strategist at Legal & General Investment Management.

"[It] means only one thing - we have been warned," added Geoff Dicks, a representative from the Royal Bank of Scotland.

Indeed, in a recent survey by Reuters, a majority of economists (56 per cent) are of the opinion that interest rates will rise again over the course of 2007.

To find out about the different ways of financing a first home, see our section ‘Affording Your First Home’.

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