UK interest rate rises may be at an end

The UK base rate of borrowing may have almost reached its peak, according to a member of the Bank of England's Monetary Policy Committee (MPC).

MPC member Kate Barker said in an interview with Reuters news agency that the property market and the state of the global economy remained her two main concerns for the overall economic outlook.

However, she pointed out that recent data has suggested that the housing market is weakening and consumer spending is slowing.

"I think it is certainly true that the message we are giving is not the same as it was when we were at a period when we were clearly indicating that tightening was continuing," she said. "But clearly we are close to, and this comes over in the minutes, closer to a point when that's not what you are signalling."

Asked if she shared fellow MPC member Stephen Nickell's opinion, expressed two weeks ago, that if weak data persisted, the Bank of England may not have to raise rates much more, Ms Barker said that view was implicit in the Inflation Report.

Quizzed about the UK housing market, the MPC member said a collapse in house prices was unlikely, though it could not be entirely ruled out.

The Bank of England has raised interest rates five times since last November to stand at 4.75 per cent.
Many analysts are predicting one more quarter-point increase in the base rate before the end of the year, but an increasing number of experts are now suggesting that interest rates have already peaked.