(1888PressRelease)
May 29, 2007 - Millions of homeowners are already suffering following previous rate hikes in August, November, January and May, but Mr King appears to be more concerned about the threat to the UK economy posed by inflation.
In a warning aimed at British businesses, Mr King said the Bank's monetary policy committee (MPC) would take "whatever further action may be required" to ensure inflation returned to its two per cent target - widely interpreted to mean that rates will rise again in the near future.
Mr King is particularly concerned that a lack of spare capacity in the economy will lead to price surges and salary escalation.
"For now, the MPC is likely to remain firmly focused on the threat to inflation posed by rapid money growth and rising pricing power," Jonathan Loynes, chief European economist at Capital Economics, confirmed in the Guardian.
"We continue to expect interest rates to rise again in the next few months, possibly as soon as June. And the risks that rates will eventually reach six per cent or even higher appear to be growing."
Quick sale property firm, National Homebuyers is not surprised. The company has been predicting a rise to 7.5 per cent since late 2006. Operations manager David Harber says: "We have been heralding the fact that all the indicators suggest continued rate rises. It is important that the UK homeowner is educated in these signals so that they can act accordingly.
"I believe that the words of Mervyn King will be misinterpreted, misunderstood or worse still, fail to be reported at all. The homeowner must understand that with the strength of the pound, repossessions at a 15-year high, lenders offering up to eight times salary, the nightmare of Hip and a lack of first time buyers, this is spelling out disaster in large neon lights. But nobody appears to be able to read what it says."
National Homebuyers is the UK's leading fast purchase property company, making a formal offer to purchase any property, in any condition.
More information relating to their own research and findings can be found
at www.nationalhomebuyers.co.uk/index.asp
or by calling 0870 979 8118.
