The chances of a rise in the base interest rate became higher last week, as one of the monetary policy committee changed sides to vote in favour of a base rate rise.
Despite the base interest rate being held firm this month, the Bank of England?s chief economist Andy Haldane switched sides to join two others of the committee voting for upward movement.
Haldane?s defection means that three members are now ready to rise, pushing up the mortgage rates of millions of homeowners.
The monetary policy committee is made up of nine members, so another two would have to change their vote in order for a rise to go through. Experts feel that August would be the earliest likely time for the next rise to be implemented.
During the vote this month, Andy Haldene, Ian McCafferty, and Michael Saunders had ‘a higher degree of confidence that the slowdown in the first quarter was temporary’ and they felt that ‘the benefits of waiting for additional information were limited’.
The majority of the committee also had greater confidence that the slowdown was ‘largely temporary’ but flagged up weaker global growth and the poor manufacturing data.
After no interest rate rise for more than a decade, the monetary policy committee increased rates by 0.25 per cent last November and have been waiting for the opportunity to raise again.
However, data since May has been mixed with rising High Street spending and consumer credit countered by a big disappointment from the UK?s industrial sector.
The pound rose by almost a cent on the dollar on the news that interest rates had been held yet again.
Now that the monetary policy committee consider the UK economy to be largely back on track, mortgage holders that are out of fixed period contracts have been urged to consider sorting out a new loan deal before the predicted rate rise in August.