"While this was the expected outcome, there will have been heated debate before the MPC decided to hold rates constant." said Jeremy Peat, Group Chief Economist at The Royal Bank of Scotland, commenting on today’s MPC decision to keep rates on hold.

"It is highly unlikely that this was another unanimous decision. All of last week’s personal sector and housing market data surprised on the upside. The house price figures may have captured the headlines, but the MPC will have been even more concerned about the ratcheting up of mortgage approvals – no signs there of deceleration ahead," said Mr Peat.

"Delaying rate rises until the traded sector's improvement is secure is preferable in principle, but not at the cost of creating domestic instability. Rate rises are the only weapon available to temper housing market – and household credit – over-exuberance. The ‘stitch in time saves nine’ theory will have been deployed by those on the Committee now arguing for a rate rise, and interest rate risks have swung to the upside."

Issued by: Linda Harper Tel: 0131 523 4205
Media Relations Manager