CML Director General Michael Coogan commented:
"Nearly two years ago we said that a modest rise in rates was needed to reduce the risk of worse pain later. The same message is equally true now, and so we expected the MPC to act today. Although never welcome, higher interest rates are now a necessary evil to encourage a gentle slowdown in the housing market.
"The small rises so far have had only a limited impact on consumer behaviour. We continue to anticipate further staged rate rises through 2004 as the MPC seeks to fine tune monetary policy. The cumulative impact will become more apparent as the year progresses - a one per cent rise in mortgage rates equates to around £60 a month for a typical £100,000 mortgage. Borrowers on variable rate loans should plan for higher mortgage costs and prepare accordingly."
