City braced for rates rise

The City was today braced for the Bank of England to raise interest rates on Thursday for the first time in almost four years.

The Bank's monetary policy committee is widely tipped to lift the cost of borrowing by a quarter of a percentage point from its current 48-year low of 3.5 per cent.

It will be the first increase since February 2000 and will mean a typical homeowner with a £200,000 repayment mortgage will pay another £30 a month.

Economists said the resurgent housing market, record consumer borrowing and mounting optimism in the manufacturing and services sector were responsible for the expected move.