"It is very unlikely that just one touch on the tiller will be enough," said Paul Mortimer-Lee, chief economist at investment bank Paribas.
He added that the Bank was likely to shade down its inflation forecast compared with its August report, but it was very clear that the economy was building up steam.
Official figures due today are expected to signal a bounce in manufacturing output in September. Meanwhile the evidence of buoyant consumer demand continues to pile up.
House prices rose by 1.6 per cent in October, the biggest monthly increase since February 1994, according to Halifax Building Society. That took them 7.1 per cent higher than a year earlier, the fastest year-on-year increase since 1989.
The average house costs pounds 65,609 against pounds 61,251 in October 1995. Halifax has revised up its full-year forecast for house prices to 7 per cent and is predicting a similar advance next year. Other housing market experts think this is still much too cautious. James Barty, an economist at Deutsche Morgan Grenfell, said: "The housing market is very buoyant. House prices inflation in double digits across the country is looking more and more likely."
Last week, Nationwide Building Society reported a 7.9 per cent rise in prices over the past year, and a jump of 0.8 per cent last month compared with September.
Separate figures yesterday showed that new housebuilding starts rose by 16 per cent in the three months to September. The total of 47,100 starts was 13 per cent higher than in the same three months a year earlier. Treasury minister Angela Knight said: "The building bricks of recovery, which have long since been there in other parts of the economy, are now in housebuilding too. Brickies are back in business."
Last month also saw an unexpectedly large rise of 0.7 per cent in M0, the narrow measure of the money supply. Its year-on-year growth increased to 7.5 per cent from 7.2 per cent in September.
The amount of cash in circulation in the economy, the main component of M0, climbed by pounds 100m during the month. Although M0 is not a reliable month-to-month indicator of retail sales, yesterday's figures did confirm the general picture of robust consumer spending.
The weekly sales figures from John Lewis, the department store group, added further anecdotal evidence. The amount of money passing through its tills in the week to 26 October was the highest so far this year, though the timing of half-term meant the year-on-year rate of growth dipped.
The London Chamber of Commerce said that the economy in London was "booming", with growth expected to top 4.6 per cent this year. It predicted unemployment in the capital would dip below 10 per cent by the end of the year for the first time since 1992.Reuse content