Economists warn that interest rates could change this week

There is a one-in-three chance that the Bank of England will raise interest rates next week, economists warned last night. 


Pressure is mounting on the monetary policy committee to lift rates from 0.5 per cent to put a lid on soaring prices. 


An influential panel of economists has told the Bank of England to ignore warnings about the strength of the recovery and to raise interest rates. 


For the first time since the onset of the financial crisis, a majority of the nine-member 'shadow' monetary policy committee (MPC) voted to raise rates, emphasising their concerns about inflation. 


The five economists who called for a rise all said rates should go from 0.5% to 1%. The shadow committee's decision appears to clash with the views of Mervyn King, the Bank's governor, who last month warned of Britain's 'fragile recovery' and signalled an imminent rate rise was unlikely.


Such a move would be a blow to borrowers but would be welcomed by Britain's army of savers who have lost out since rates hit rock bottom in March 2009. 


The economy shrank by 0.5 per cent in the final three months of 2010 after a year of stuttering growth.