Rates predicted to stay on hold

Will rates go up again this month?

Economists are predicting the Bank of England will leave interest rates at 4.5% for July when it delivers its monthly decision.

Despite recent warnings from governor Mervyn King that rates may have to keep rising to cool house prices, no change is expected on Thursday.

The Bank's Monetary Policy Committee (MPC) is instead expected to start raising rates again from August.

UK interest rates were put up by 0.25% in both June and May.

VOTE RESULTS Are higher interest rates affecting your spending? I'm a little more cautious 21% I'm more careful about buying on credit 13% I'm holding back on buying high-value goods 8% I have put off buying a house 20% Not at all - I'm not worrying yet 38% 12854 Votes Cast Results are indicative and may not reflect public opinion Vote now closed

Despite Mr King's suggestion that rates may need to keep rising, economists point out that the Bank of England has already said it is committed to a gradual increase in rates.

The Bank is therefore expected to pause this month to allow more time to judge the effect of the last two rises.

It will announce its July decision at 12.00BST on Thursday.

Month's pause

Societe Generale economist Brian Hilliard said a July rise was unlikely before the next UK inflation report in August.

"We cannot rule out the possibility of a third consecutive monthly rate increase this week but the odds still favour August," he said.

"The Bank has made a strong point with back-to-back moves and cannot expect an instant response to those and so it would be reasonable to time the next move to coincide with the next inflation report."

David Smith, economist at stockbrokers Williams De Broe agreed that an August increase was more certain.

"The MPC is likely to pause for breath in July, while leaving open the option of raising rates in August, once it has seen the forecasts prepared for the August inflation report," he said.

Last month Mr King warned that UK property prices were "well above what most people would regard as sustainable in the longer term".