Insurance News Archive

Interest hike 'a certainty'

Last month saw a further rise in housing prices, according to Nationwide, leading one analyst to declare that a rise in interest rates next month is "a certainty".

"The Bank of England (BoE) held off raising rates at the beginning of April," said Nationwide's chief economist Fionnuala Earley.

"But the acceleration in house prices during the month makes a rate rise on the Monetary Policy Committee's (MPC's) tenth anniversary look like a certainty."

Nationwide's monthly report into the price of housing found a 0.9 per cent rise in April, almost double that of March and putting the average UK house price at £180,314.

Ms Earley said that the interest rate rises by the MPC had failed to reverse the strong performance of the housing market, but added that there has been an "underlying trend [of] softening".

However, the results from Nationwide are contradicted by those from Hometrack who found that prices rose by 0.7 per cent in April, which was in fact a slowdown from March's growth rate of 0.8 per cent.

30 Apr 2007