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| UK interest rates set to hit 5.5% |
| 30 July, 2007 |
The Bank of England is widely expected to raise its main interest rate by a quarter of a percentage point to 5.5% because of concerns about inflation.
Rates have been left unchanged for two months and economists widely expect a rise on Thursday.
UK consumers are proving robust in the face of the higher borrowing costs, and price growth has remained well above the government's preferred 2% level.
A number of analysts have warned that rates need to rise by half a point.
Even a quarter-point rise to 5.5% will put the UK's base rate at its highest level since 2001.
The Bank of England's Monetary Policy Committee (MPC) will announce its decision at midday on Thursday.
"We are convinced that the MPC will raise rates," said Philip Shaw of Investec, adding that he would not completely rule out a half a percentage point increase.
Higher interest rates would mean that homeowners with a mortgage of £100,000 would see monthly repayments rise by about £16 on average.
Source: BBC News UK
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