Though the housing market has shown renewed strength since the New Year the
full effect of increased borrowing costs will not be felt for some months
and we expect house prices to slow in response to higher interest rates
towards the end of the year.
However, strengthening economic conditions are yet to be confirmed in
manufacturing output and business investment, and with inflation very low,
further rate rises should be resisted until there is solid evidence that the
UK recovery has become more broad based.
