The Bank of England says it is in no rush to raise the base rate of interest, easing home-owners' fears of mortgage costs rising this year.
During its latest Inflation Report briefing, the Bank's governor Mark Carney moved to reassure borrowers that bank rate - used by lenders to help determine mortgage costs - would be likely to remain at its record low of 0.5% for "some time".
He would not comment on current market expectations for the bank to act in the second quarter of 2015, but said there was sufficient slack in the economy to erase the prospect of a rise in the short term.
The remarks led economists to speculate that the bank could hold off on a rate rise even until after the next election - due in 12 months' time.
Mr Carney said the bank would be taking a hard look at mortgage affordability amid concern that wages are failing to rise at a pace strong enough to support rising rates.
He told reporters the bank's Financial Policy Committee (FPC), which examines risks to financial stability, will not target house prices but tackle risks to stability from the housing market amid fears of a growing bubble across London.
Mr Carney said that the bank could not act regionally - only on a national basis.
No comments:
Post a Comment