Further interest rate rise ‘cannot be ruled out’

Howard Archer, chief UK and European economist at Global Insight, suggests that while an increase in the cost of borrowing is unlikely to be brought in by the Bank of England’s monetary policy committee (MPC) in August, the option is still on the table.

“While a back-to-back 25 basis point hike in interest rates is very unlikely next Thursday, it cannot be totally ruled out given faster, above-trend growth in the second quarter and the somewhat disappointing inflation data for June,” he said.

“Furthermore, there is clearly a faction within the MPC who feel pretty firmly that interest rates need to rise further sooner rather than later if consumer price inflation is to be kept to two pert cent on a two-year horizon.”

If the MPC does opt to raise the base rate next month, it will be the fifth time since of August of last year that the pressure on Britons looking to find a debt solution has been increased.