The BoE Monetary Policy Committee member gives a call for rate cuts

Posted under General by Alan

A member of the Bank of England’s Monetary Policy Committee that sets interest rates, recently said in a speech house prices could fall by almost 30 per cent over the next few years provided interest rates were not cut. Mr Blanchflower added: “I am not suggesting that such a drop will necessarily occur, but it may well be the case. Cutting interest rates now may help in preventing such a dramatic fall.” A regular supporter of lower rates, he mentioned ‘aggressive action’ was required to stop a steep downturn in the economy.

No surprise, consumers are now getting more cautious. It is not difficult to understand why. A market analyst pointed out: “April was another tough month for the housing market.”  The figures only substantiated this. The Bank’s data showed new mortgage approvals had decreased to their lowest level since records started in 1990. This was partly owing to the problems faced by first-time buyers in getting a good mortgage deal without a significant deposit.

On the other hand, the fall in prices - down 1.8 per cent over three months - compared with the previous quarter, is sure to be welcomed by some new buyers who have witnessed prices shoot up by 45 per cent in the past five years.

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