(1888PressRelease)
May 17, 2007 - Mr King has come in for criticism recently for failing to keep inflation below the three per cent upper limit imposed by chancellor Gordon Brown.
However, he hinted in a meeting with the Treasury Select Committee that an interest rate rise might be on the cards in order to bring inflation back under control.
Mr King was also on the defensive over claims that the MPC had failed to account for the rapidly expanding money supply in the UK economy, which ultimately caused the inflationary headache.
In fact, Mr King insisted, world market conditions had been more of an influence on the UK economy's predicament than the money supply had been.
"What determines asset prices in the UK is very much what is happening in the world market," Mr King confirmed.
"And in the past few years there’s been a real sharp fall in risk premium around the world and that has driven up asset prices."
It is thought that higher interest rates could spell trouble for many homeowners already struggling to cope with rate hikes in August, November and January.
Julian King, director of National Homebuyers, the UK's leading quick sale property company, adds: "We predicted damaging interest rate rises as early as 2005. Now this has become a reality everybody seems surprised.
"In line with Professor Tim Congdon, a member of the Treasury Panel of Independent Forecasters, we predict interest rate rises to increase to 7.5 per cent.
"To homeowners this will stretch them beyond their means and as a result more and more people will be turning to National Homebuyers, the UK's quick sale property solution."
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