(1888PressRelease)
May 13, 2007 - However, even if this predicted scenario is to hold true it is expected that a number of mortgage holders will be placed under unbearable pressure, leading to a raft of repossessions.
The responsibility for this predicament should be born entirely by the Bank of England's monetary policy committee (MPC) - which sets interest rates - according to the National Institute of Economic and Social Research (NIESR), as inflation should have been eased at an earlier date.
Had the MPC chosen to increase rates to five per cent in August 2005, the NIESR argues, consumer price index inflation would now be at three per cent rather than 3.1 per cent.
The situation could also been resolved had the MPC agreed to a one per cent rate hike in the spring of 2006.
However, as this was not the case some analysts have gone as far as to forecast a 0.5 per cent interest rate rise by the MPC next month to ensure CPI inflation returns nearer to the two per cent target stipulated by chancellor Gordon Brown.
National Homebuyers, the UK's leading quick sale property company comments that the 'writing is onthe wall'. Director Julian King says: "We can see that the interest rates will rise way above a further 0.25 per cent.
"The writing is on the wall and has been for sometime. Consumer opinion is that the rate will increase, which is one of the reasons that National Homebuyers are receiving such a volume of enquiries from people who want to sell their house quickly before they get caught further in the interest rate hikes.
"Regardless of the rise next month, we are confident this will rise to 7.25 per cent by the end of this year."
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