Rates: Left on hold?

Homeowners are expected to be saved from a further rise in interest rates this week but opinion remains divided on whether they may take a hit early next month.

Whilst the city had priced in further increases, market sentiment suggests the need for a rise may have been reduced by falling house prices and a drop in borrowing.

Comments from the monetary policy committee have signalled that the next move in rates is likely to be upwards however.

Some suggested the bank may have opted for a quarter point rise on Thursday.

But well-informed speculation suggests it will hold fire until next month - or shelve any increase until beyond election day itself.

Any pre-election increase could give prominence to the issue of higher mortgages during the election campaign.

Labour PPC and leading Brownite Ed Balls moved last week to play down the economic significance of any increase in rates.