First, it was the Policy Exchange thinktank, with concerns that the Bank of England would be looking to raise interest rates rapidly to keep post-quantatitive easing inflation in check. The PE forecast was for 2.5% base rates by next year, reaching 8% in 2012. Now, Moneyfacts has applied current profit margins, added a little to offset the greater risks the banks would be taking, to calculate what that could mean to the borrower, and painted a picture of 14% mortgages. Do we believe this is credible? Not really. The Bank of England's job - officially - is to respond to inflation, but we all know that it does so with one eye on the property market. And would the lenders really want to devalue their collective assets by cracking the market? We don't think so. Do you? More here and here.

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