UK Homeowners will probably not see borrowing costs rise again until August, say experts analysing the minutes of the Monetary Policy Committee’s June meeting just released.

All nine members of the Bank of England's Monetary Policy Committee voted for this month's quarter-point rise in interest rates to 4.5 percent, the minutes of their meeting show.

The minutes indicate that members are ready to raise rates again, but analysts suggest they will wait until August when they can assesses the impact of the half point increase in May and June. Of particular importance will be what happens to house prices.

MPC members thought indicators from the housing market suggested that house price inflation had picked up further, and so was likely to be even stronger in 2004 Q2 than the Committee had expected at the time of the Inflation Report.

The average of the Nationwide and Halifax house price indices had increased by 6.1% in the three months to May, a rise of 0.1 percentage points from April. But there were a few tentative signs that activity might be easing, the members noted

Also, a preview of the Royal Institution of Chartered Surveyors (RICS) survey for May pointed to a sharp decline in the balance expecting house price increases in the next three months, and the ratio of sales to unsold stocks suggested that the market had loosened slightly in April and May.

The number of housing loan approvals, although still high, had fallen a little from its peak at the end of 2003. The annual rate of secured lending growth had increased in April to 15.3%, but past rises in house prices meant that the rate of secured lending growth was likely to remain high for some time even if inflation soon began to ease.

There were also some anecdotal reports that houses were becoming harder to sell, noted the committee. But these indicators of easing activity were very tentative, and it was clear that any slowdown in house price inflation would be later and from a higher rate than the Committee had previously envisaged.