(by G.Andersen, FinanceGates.Com)

The Bank of England indicated interest rates to be close to peak. Before the end of next year only one or two rises are expected, it notes.

The Bank's main rate, which went up to 4.75 per cent last week, will stop at 5.25 per cent in the middle of next year, economists expect. The Bank forecast annual gross domestic product to lift to about 3.8 per cent in next few months, a housing market will contribute to the slowing of growth 2 per cent next year. Expected to rise slightly above 5 per cent next year, interest rate is near its peak. Inflation would edge up to its 2 per cent target within two years and stay there, the Bank predicts.

Analysts forecast rates would peak from 5 up to 5.5 per cent. They also expect sharp slowdown in house price inflation.