The Bank of England today left its key lending rate at 4.75% as signs mount that the housing market has turned and the economy is slowing in response to five interest rate hikes since November.
All 50 analysts polled by Reuters last week had predicted no change this month. Most expect another quarter percentage-point hike before the year-end, probably in November as the BoE prepares new economic forecasts.
But a number of analysts wonder whether 4.75% might represent the peak of the current interest rate cycle, after the country's largest mortgage lender reported house prices fell 0.6% in August.
A peak at 4.75% would be much lower than the top of the last rate cycle of 6% in February 2000 or the 7.5% hit in the cycle before in June 1998.
Even those analysts who predict a further hike in November do not expect many more increases, especially after the BoE's last quarterly forecasts in August suggested that one more quarter-point hike could be enough to ensure that inflation hits its 2% target.
Still, UK interest rates remain more than three times the level in the the US and more than double the 2% rate in the euro zone. The Bank of England offered no statement to accompany its decision.
