Influential loan rates setter sees no crash ahead


Kate Barker, one of the nine people who set interest rates each month, said it was "not immediately obvious" why recent developments should provide a "trigger which significantly alters expectations of continued robust house price growth".


Ms Barker's views are likely to be seen as reducing the prospect of an early cut in interest rates, since she is a swing voter on the committee.

She noted that households had so far shrugged off the impact of the credit crunch. "There was little deterioration in consumer confidence in September. Retail sales volumes have remained strong throughout the third quarter, although discounting meant that retail values grew only weakly."

Ms Barker said that in early August she had been doubtful whether the Bank's five interest rate increases since August 2006 would be enough to stifle inflationary pressures, but that the turmoil in markets had changed the balance of risks.

"The evidence from business surveys and housing market indicators will be an important part of my judgment over the next few months about how far the downside risks to the outlook have increased."