(1888PressRelease)
May 12, 2007 - According to the bank, the decision was in order to protect the economy from further inflation.
In March, consumer price index (CPI) inflation was recorded at 3.1 per cent - towering above the two per cent target imposed by the chancellor of the exchequer for the first time.
However, while the Bank predicts that CPI inflation will return to its two per cent target in the medium term, there are concerns that the rate rise will lead to a number of families facing financial difficulties.
The move is also expected to create uncertainty in the UK housing market.
"Today's rate rise will reinforce the slowdown that is already underway in the UK housing market," commented David Stubbs, senior economist at the Royal Institution of Chartered Surveyors.
Julian King from the UK's leading quick sale property company, National Homebuyers adds: "We anticipated a 0.5 per cent rise, but regardless, the housing market will weaken as homeowners are still hit with a further rise in their mortgage bills.
"First time buyers will also not be able to borrow as much as before and with the introduction of Hips less than a month away and less available purchasers 'in the market', we anticipate a further rise in the volume of people contacting us to find a quick solution to the property sale."
National Homebuyers purchases properties quickly and without the need for Hips packs.
For further information on a quick house sale or to release equity in your home
please contact National Homebuyers
on 0870 979 8118
or visit www.nationalhomebuyers.co.uk.
