Insiders point out that the base rate might be facing another hike this season as key policy makers of the monetary policy committee (MPC) voted for an increase.

Insiders point out that the base rate might be facing another hike this season as key policy makers of the monetary policy committee (MPC) voted for an increase.

25th June, 2007: If recent reports are to be believed, it seems four out of nine members of the Bank of England's MPC seem to have voted for an increase earlier this month. This may well bring the borrowing cost to around 5.75 per cent. Financial experts are convinced that a likely base hike might well be on the cards as even the bank's governor, Mervyn King seems to be all for it.

If this deal does go through, it will be the fifth time that the Bank of England has decided to raise its rates since August 2006. For borrowers, this certainly isn't happy news. An increase in the base rate will mean corresponding increase in the interest rates for secured loans, as well as unsecured loans.

"The minutes give the impression that for some of the other MPC members it was a question of when to raise interest rates again rather than if." says Global Insight's chief UK and European economist Howard Archer. According to him, there is a possibility that the interest rates will reach six per cent before the end of the financial year.


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