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Further rate rise `could happen in autumn`
10 August 2007
The Bank of England has signalled that it may need to raise the base interest rate again this year to help curb inflation.
According to its latest quarterly Inflation Report, a quarter-point increase to six per cent - the highest level since 2000 - could help bring inflation back down to its two per cent target during 2008.
The Bank`s governor Mervyn King said that recent upsets in the credit market, caused by the US subprime lending turmoil, was not an "international financial crisis".
"[We] cannot be sure if what we`re seeing so far foreshadows a more disruptive move on the markets or whether there`s a more gradual easing of pressure that allows credit spreads to widen to more sensible levels," he remarked.
"So it`s impossible at this stage to judge how large and how persistent the tightening of credit conditions is likely to be."
The Bank`s monetary policy committee has increased the base interest rate five times in the past year.
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