LONDON, Sept 8: The Bank of England is widely expected to leave interest rates unchanged at 4.75 per cent on Thursday after recent signs that a string of hikes have started to douse the red-hot housing market.
Last month the British central bank announced its fifth quarter-point increase in borrowing costs since November to try to rein in soaring property prices and inflationary pressures stemming from high oil prices.
But since then there have been signs of a cooling of the housing market. Leading home-loan provider Halifax said last week that house prices fell for the first time for two years last month.
All 19 forecasters polled by AFP's financial newswire AFX predicted that the Bank of England's nine-member monetary policy committee will keep rates on hold this month. "The data over the last month or so has been almost unambiguously weak," said Jonathan Loynes, an economist at Capital Economics.
There were "significant signals" that the housing market was beginning to respond to the series of rises in lending costs, he said. Economic growth appeared to have peaked in the second-quarter of this year and an expected slowdown in the housing market meant the economy as a whole was likely to lose momentum over the next year, argued Loynes. -AFP
