I was on the road - well, the train, actually - between here and Manchester yesterday when the news came through that, contrary to recent experiences, interest rates can actually move. The decision went against virtually all expectation and analysis, including political analysis of the new committee membership. In some way, it looks something like a warning shot... rates remain historically low, so there's little danger of any real harm being done, but the sound of it might just resonate enough to cool the over-heating markets. Here's what other people are saying:

It will curb spending [Times]
Hah! Told you so! {First Rung]
Housing market expected to slow [FT]
Borrowers should be wary of fixed rate deals [Reuters]
Why this is all good for the ftb [First Rung]

First Rung's coverage has been particularly interesting, which is why I've included two links. If you have time to read just one piece, make it the last one... which includes a forecast of further rises bringing rates up to perhaps 5.5%. How this squares with today's headline hysteria about insovency I don't know. It's in neither the borrowers' nor the lenders' best interests to force debtors beyond the scope of repaying a loan. And if First Rung is right, and ftbs will profit from special deals in the short term, what happens when the deals run out? Will First Rung then be calling for rate cuts, before the market topples and those very same ftbs find themselves, three or five years down the line, dealing with negative equity?