BANK of England Governor Mervyn King has dismissed claims that the monetary policy committee (MPC) has abandoned a gradual approach to interest rate changes.
He told the Treasury Select Committee that two consecutive rises in the cost of borrowing to 4.5 per cent should not be interpreted as a U-turn in strategy.
But Mr King said inflationary pressures such as the boom in house prices meant the case for caution was less compelling.
Mr King warned homeowners not to expect the value of their property to rise forever.
House prices have risen by more than 20 per cent over the past year, but Mr King said the chances of falls were greater than they were.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article