The impact of last November’s half-a-percent interest rate rise on home buyer confidence has been offset by the UK’s cheap and readily-available mortgages, the Bank of England (BoE) has revealed in its latest update on the economy.

The report, which is compiled by its 12 agents across the country by talking to 700 businesses including estate agents, looked at the economy from late November last year until mid-January 2018 and compared business activity with the previous quarter and year.

As well as increasing its base rate from 0.25% to 0.5% in early November last year, the BoE’s Monetary Policy Committee last week said another interest rate rise could take place as early as May.

It also said that more interest rates are in the pipeline as the economy grows, signalling an end to UK homeowners’ reliance on cheap mortgages and credit.

The BoE Agents’ Report also says that housing market activity remains subdued but steady, held down by both weak supply and demand, but that the new-build and rental sectors remain buoyant, pushing up new-build prices and rents.

“Housing demand was particularly weak in London and the South East, especially for the most expensive properties,” it says.

The BoE report also reveals that overall economic growth has held steady helped by increased demand for the UK’s professional services from overseas, and growth in exports driven by the current weak pound, but that construction had continued to slow.

Read the BoE’s February report in full.