The Bank of England monetary policy committee's decision to leave the base rate unchanged at 4 per cent caught out a good number of economists last week but most expect to see a rise next month.
Market commentators such as Charcol senior technical adviser Ray Boulger believe the base rate will rise by 0.25 per cent in May to coincide with the publication of the MPC's quarterly inflation report.
Royal Bank of Scotland chief UK economist Geoffrey Dicks predicts that rates will rise by 0.25 per cent in May, August and November, peaking at 4.75 per cent.
Boulger says an ease in consumer spending, an increase in national productivity and the strength of sterling have all counterbalanced rising house prices and higher lending.
He says: “The MPC probably feel they are between a rock and a hard place, with the housing market showing renewed strength and consumer spending still buoyant but other sectors, particularly manufacturing, struggling to make much headway. Furthermore, sterling remains strong against the dollar and is improving steadily against the euro.”