The Bank of England will probably become the first of the world's major central banks to raise interest rates when it meets this week. Four of the bank's nine policy makers voted to raise interest rates last month, warning that continued consumer spending growth and demand for property could help push inflation above the bank's 2.5pc target in the medium term. "Friday's data on the UK housing market have probably sealed the case for a rate hike at this week's meeting of the Monetary Policy Committee (MPC)," said Simon Barry, economist at Bank of Ireland. Figures from the Nationwide showed that British house prices rose 2pc in October on the month, which represents a pronounced acceleration on recent trends, and were up 16.1pc on the year.
The last time a member of the MPC voted for a rate hike was in July 2002, when the then deputy governor Mervyn King called for a 25 basis point increase. The Bank of England last raised rates in February 2000. Since then, it has cut interest rates nine times to a 48-year low of 3.5pc. The US Fed last raised rates in May 2000 - to 6.5pc - while the ECB, which also meets this week, last lifted rates in October 2000 - to 4.75pc. //www.fxcentre.com