Amid widespread calls to help boost consumer confidence, The Bank of England’s Monetary Policy Committee voted to maintain the official Bank Rate paid on commercial bank reserves at 5.0 percent this week.
There were some prior predictions that the committee could raise the rate to slow consumer spending. The combination of food and energy price rises and fears of a recession has caused the Bank of England to keep a wary eye on the government’s inflation target of 2 percent.
Prior to the announcement, The National Association of Estate Agents (NAEA) called on the Bank of England to reduce interest rates or at least to maintain them in the current climate.
Peter Bolton King, Chief Executive of the NAEA, explained that a reduction in interest rates would provide a pivotal way for the government to help revitalise the current market place.
He said: “A cut in rates would play a major part in helping to stimulate consumer confidence at a time where individuals’ self-assurance has taken a heavy hit.
“Lending is not getting any easier and if anything the mortgage rates are getting tighter, causing the housing market to suffer. By decreasing rates it will hopefully act as a catalyst to encourage lenders to reduce their rates and pass them onto consumers allowing the current mortgage shackles to be loosened somewhat, giving house hunters room to breathe.
“A positive housing market is essential for the overall economy. There remain strong economic factors in the country like high employment but confidence is a huge issue and only a significant move will restore that confidence and convince lenders and public alike - the Bank of England needs to reduce interest rates and take action fast encouraging buyers back into the housing market.”
• Potential and existing landlords are being invited to receive free expert guidance on how property investment can help secure their financial future in Liverpool & Manchester this month.
The Money Centre, the independent buy-to-let mortgage broker, is hosting events on Tuesday, 19 August, at Marquee Suite, Devonshire House Hotel, 293-297 Edge Lane, Liverpool and Wednesday, 20 August, at Tenant’s Hall, Tatton Park, Knutsford, Exhibition area open from 10:30am-3pm. Seminar programme including a free lunch is 11:30am-2pm.
The seminar programme will be running from 11.30am to 2pm with breaks throughout the day. All attendees will be able to given advice on weathering the credit crunch and opportunities for taking advantage of the current market conditions.
Topics discussed will include:
• The current economy
• Successful planning during the credit crunch
• Top secrets to renting
• 2020 vision - where you want be in the future
• Hints and tips for the portfolio landlord.
