A meeting which could be quite weighty is taking place this week for UK’s Monetary Policy Committee. A meeting which could decide the fate of many living in homes, or are seeking to become homeowners. The base rate increase will affect all those within the UK and not in a subtle way. So many citizens have gotten used to an extra low base rate resulting in low interest rates. An increase will surely be shocking to the entire country.

An increase in some estimations is more probable this month than last, but odds are the base rate will remain the same, despite elevated inflation. Bank of England governor, Mervyn King, knows an increase will continue to put a budget squeeze on households of the UK. For that reason, he feels great caution must be used when considering an increase in the base rate.

He also believes the current elevated inflation rate can be explained by the increased VAT, and higher oil and food prices.

The decision by the Bank of England governor to raise the rate could stay in limbo for some time. The components which are leading up to the possible increase are likely to correct themselves in 2012, in his belief. Those include the dramatic rise in oil prices and an increase in the VAT.

Capital Economic’s economist, Vicky Redwood, commented on the UK recovery and how it is tied to the base rate, saying: "The continued uncertainty about the underlying strength of the UK recovery should prompt the MPC to keep interest rates on hold at this week's meeting."

Even with the obvious reasons why the base rate should remain the same for at least one more month, there are still doubts that it is a sure thing, according to some economists.