While the housing market continues to bound along, taking only short breathers before pushing on further, the Bank of England are getting more and more concerned about the state of the UK economy.  Base rates have already been increased to 5.50% in what has been a sustained campaign for the last year, but the consumer does not seem to be taking much notice.

The Bank of England committee will be announcing their decision at 12 o’clock today, although many are already resigned to another increase in rates.  While there had been slim hopes that the property market may have topped last month, recent figures show the sector is still in a very firm upward trend.  Recent news regarding the rate of inflation has also been a little worrying, and these two factors are the main reasons why rates are most likely to rise.

The knock on effect to the already stretched consumer will be a rise in loan rates, credit card rates, etc although there will be some rest bite for those with savings who should see an increase in savings rates.  While it may not yet be raining for many of the UK population, there is no doubt that the storm clouds are gathering over the UK economy. 

The Bank of England have a very tricky situation which they have handled with care so far, but they now seem set to raise the stakes a little.  The committee are obviously keen to avoid any long running recession although it remains to be seen how the market will react to the expected news later today.