Consumer confidence rose in April as Britons shook off recent interest rate rises, according to Nationwide…

The building society's monthly consumer confidence index rose two points to 90 - its highest level since October 2006, reports BBC News.

Nationwide said the increase suggested UK consumers had come to terms with three recent interest rate rises.

However, the Bank of England is widely expected to raise rates by a quarter percentage point to 5.5% on Thursday, in a bid to keep a lid on inflation.

Bank governor Mervyn King was forced to write to the government last month after the consumer price measure of inflation rose to 3.1% in March - well above its 2% target.

House price hopes

Nationwide said consumers remained upbeat about the future, lifted by hopes for the UK economy and higher house prices.

The building society added that expectations for future house price growth had also improved in April, with consumers anticipating house prices would rise by 3.5% over the coming six months, up from 3.2% in March.

"This increase in confidence suggests that consumers have come to terms with the recent interest rate rises," said Nationwide chief economist Fionnuala Earley.

"But, with inflation more than 1% above target, it seems likely that the (Bank of England) will this week increase rates at least one more time.

"The extent to which this hits consumer confidence will to some extent depend on the impact of falling utility prices this summer against higher debt repayments".