The Monetary Policy Committee (MPC) met earlier this month and decided not to increase interest rates. However, the MPC has indicated that it is not happy with the continued house price growth, it does not believe it is sustainable and that it believes that future increases in interest rates are required.
Our view
As predicted on numerous occassions on this site, expect probably three or four increases in 2004 of around 0.25% each time - expects rates to finish in 2004, 1% above 2003.
Base rate is now 3.75% - we expect 4.75% by the end of 2004.