The governor of the Bank of England, Mark Carney, is expected to come under fire from MPs over the central bank's policy of "forward guidance" following criticism that low rates are helping to fuel a house price bubble.
Several MPs on the Treasury select committee are concerned that the central bank's determination to hold interest rates at historically low levels until at least 2016 have combined with government mortgage subsidies to artificially inflate the housing market.
Rocketing house prices in London have set off alarm bells in parliament that the UK's housing market is in the early stages of a boom that will eventually crash, sending the economy back into recession.
Labour MP Pat McFadden said: "It is something the committee is concerned about, in terms of how we ensure this doesn't reproduce a bubble situation."
Andy Love, the Labour MP for Edmonton, said: "Undoubtedly the housing market will come up. It's not just that prices are rising in some parts of the country, especially London. We will want to know what the Bank of England will do if it appears that house price inflation is beginning to take off."
MPs are also concerned that the monetary policy committee, which sets interest rates, will be forced to clamp down on a housing bubble by raising rates prematurely.
Tory MP Mark Garnier said he wanted reassurance that a return to higher interest rates will not trigger a flood of bankruptcies and home repossessions as homeowners find they can no longer afford monthly mortgage payments.
Garnier said many of his constituents were only able to afford mortgage payments while interest rates were low. "I'm worried about the collossal level of household debt, which is still 140% of GDP and means many families are vulnerable to any rise in interest rates."
He added that almost one in five mortgage payers had only £200 in disposable income, which could easily be wiped out by higher interest bills. "Mark Carney has an immensely challenging time ahead because he could mismanage the situation and create a huge amount of damage," he said.
The Treasury select committee started a review of monetary policy following Carney's appointment in July, which was quickly followed by a change in the MPC's interest rate policy. The committee said it would not raise rates until unemployment fell to 7%, which it predicted would not happen until 2016.
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