The Bank of England's monetary policy committee (MPC) flirted with raising interest rates by 0.5 per cent in its May meeting, it has been revealed.
May 29, 2007 (Press Release) --
The publication of the meeting's minutes show that although the eventual decision to increase rates by 0.25 per cent was unanimous, a number of committee members were toying with the idea of a 0.5 per cent hike - the first time a rise of this magnitude would have been effectuated since the government granted the Bank independence in 1997.
"For some members, the question was whether bank rate should be increased by 25 basis points or whether there was a case for a rise of 50 basis points - given the upside risks to inflation over the medium term and the buoyant outlook for growth and demand," the minutes state.
"The decision to raise rates by the usual quarter-point was eventually taken because of 'uncertainties' about the impact of past hikes and concerns that a 0.5 per cent increase might 'create downside risks to growth'."
However, the minutes also show that the MPC has not ruled out another hike later in the summer.
"The committee agreed that, should the economy continue to develop broadly in line with the central expectation, bank rate could be raised further as necessary," the minutes advised.
UK property purchasing company National Homebuyers was aware that a 50 basis point rise was on the cards. Director Julian King says: "I stated publicly before the rise that one should expect that a 0.5 per cent rise was a very real probability.
"I also stand by the claim that the rate will rise to seven per cent or more within 12 months.
"We are seeing the knock-on effect of the rate rises in the number of customers whose financial problems we are solving, daily. We purchase properties quickly, all over the UK, solving many peoples financial and accommodation problems in one".
National Homebuyers guarantee to make a cash offer to purchase any property, in any condition. A service that is enjoyed by homeowners needing a quick sale, for whatever reason. More information can be found at www.nationalhomebuyers.co.uk/index.asp or by calling 0870 979 8118.
"For some members, the question was whether bank rate should be increased by 25 basis points or whether there was a case for a rise of 50 basis points - given the upside risks to inflation over the medium term and the buoyant outlook for growth and demand," the minutes state.
"The decision to raise rates by the usual quarter-point was eventually taken because of 'uncertainties' about the impact of past hikes and concerns that a 0.5 per cent increase might 'create downside risks to growth'."
However, the minutes also show that the MPC has not ruled out another hike later in the summer.
"The committee agreed that, should the economy continue to develop broadly in line with the central expectation, bank rate could be raised further as necessary," the minutes advised.
UK property purchasing company National Homebuyers was aware that a 50 basis point rise was on the cards. Director Julian King says: "I stated publicly before the rise that one should expect that a 0.5 per cent rise was a very real probability.
"I also stand by the claim that the rate will rise to seven per cent or more within 12 months.
"We are seeing the knock-on effect of the rate rises in the number of customers whose financial problems we are solving, daily. We purchase properties quickly, all over the UK, solving many peoples financial and accommodation problems in one".
National Homebuyers guarantee to make a cash offer to purchase any property, in any condition. A service that is enjoyed by homeowners needing a quick sale, for whatever reason. More information can be found at www.nationalhomebuyers.co.uk/index.asp or by calling 0870 979 8118.
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