Bank warns of more interest rate rises

The Bank of England will raise interest rates again if house prices continue to rise.

He stressed the importance of the housing market when deciding each month where to peg the base lending rate, and noted the link between rising house pr ices and the buoyancy of consumer spending.

"They have represented some of the most important pieces

of news," he said in an

interview with the Financial Times. Mr King gave some hope, however, that interest rates may stay level at 4.5 per cent when the monetary policy committee meets later this month.

He has overseen four rate rises of a quarter point each in the past eight months.

Housebuilders have recently spoken out about their concern of too rapid a rise in interest rates, after noting price stagnation in the South-East and Midlands.