Interbay has predicted that the surprise base rate rise will not be the only rate rise in 2007.
This comes after the Monetary Policy Committee voted to raise the base rate to 5.25%.
Colin Bell, operations director at InterBay, says: This months rate rise quickly became necessary due to excessive activity in the service sector at the end of 2006 into this month.
“The economy is over heating at present and the rate rise decision by the MPC is designed to try and slow this down.
Property-wise, the commercial sector has had immense growth over the last three years and whilst I think it will continue to grow in 2007, it could be muted with increasing rates potentially decreasing new investment.
However, the commercial remortgaging market will continue to be strong, as business owners look to release tied up capital.
“This will be a half year of attempts to cool down the economy.