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| Version 1 | Version 2 |
|---|---|
| Bank expected to raise UK rates | Bank expected to raise UK rates |
| (20 minutes later) | |
| The Bank of England is expected to raise UK interest rates from 5.5% to 5.75% later, as it resumes efforts to reduce inflation. | The Bank of England is expected to raise UK interest rates from 5.5% to 5.75% later, as it resumes efforts to reduce inflation. |
| Most economists predict the rise after Bank governor Mervyn King said recently that inflation remained a concern. | Most economists predict the rise after Bank governor Mervyn King said recently that inflation remained a concern. |
| They also point to the fact that while rates were kept level in June, four of the nine members of the Bank's Monetary Policy Committee voted for a rise. | They also point to the fact that while rates were kept level in June, four of the nine members of the Bank's Monetary Policy Committee voted for a rise. |
| However, a minority of analysts do feel rates may remain on hold for July. | However, a minority of analysts do feel rates may remain on hold for July. |
| These economists point out that while the most recent figures showed that inflation remained above the government's 2% target, it did actually slow to 2.5% in May from 2.8% in April. | |
| A rise in interest rates from 5.5% to 5.75% would put an extra £16 a month on an average £100,000 repayment mortgage, but it would be good news for savers, who should receive more for their investments. | |
| Mixed housing signals | Mixed housing signals |
| There is also some dispute about the ongoing strength of the housing market. | There is also some dispute about the ongoing strength of the housing market. |
| While the Halifax revealed on Wednesday that UK house prices rose 0.4% in June, Land Registry figures showed that the price of flats, as opposed to houses, in most parts of the England and Wales were now falling slightly. | While the Halifax revealed on Wednesday that UK house prices rose 0.4% in June, Land Registry figures showed that the price of flats, as opposed to houses, in most parts of the England and Wales were now falling slightly. |
| Philip Shaw, chief economist at Investec, said that an increase to 5.75% at this month's meeting was definitely the most likely outcome. | Philip Shaw, chief economist at Investec, said that an increase to 5.75% at this month's meeting was definitely the most likely outcome. |
| "We have long argued that the committee would be unlikely to wait until the next Inflation Report in August to tighten again," he said. | "We have long argued that the committee would be unlikely to wait until the next Inflation Report in August to tighten again," he said. |
| "Does this view look correct? We very much think that it does." | "Does this view look correct? We very much think that it does." |
| However, Howard Archer, chief UK economist at Global Insight, said it remained "far from certain" that rates would go up in July. | However, Howard Archer, chief UK economist at Global Insight, said it remained "far from certain" that rates would go up in July. |
| The Bank of England will announce the latest monthly rate decision of its Monetary Policy Committee at noon. | The Bank of England will announce the latest monthly rate decision of its Monetary Policy Committee at noon. |
| Rates have so far risen four times since last August. | Rates have so far risen four times since last August. |