A senior Bank of England official has warned that homeowners could be hit with another interest rate rise.

Charlie Bean, the Bank's chief economist and a member of its rate-setting monetary policy committee, said: "If growth stays above the UK's trend rate for any significant period, then further interest rate rises may be required."

Speaking to Bloomberg News, he added: "We'll take this one step at a time. We want to look at this cautiously to see how things pan out."

Also yesterday a CBI survey revealed the manufacturing sector had shown signs of improvement over the last month. Order books had improved and export orders were at their highest level for 18 months.