Let’s be honest, I am sure no-one expected to see that the Bank of England Monetary Policy Committee, (MPC), had suddenly raised rates from their current 0.5% level, although some commentators have been a little jittery with inflation nudging 3%.
What is more interesting is that not only have the MPC decided to take a pause in their campaign of Quantitative Easing, £200 billion seems to have been enough of a spending spree for now at least, but you could argue that Bank Base has now entered a new phase – I call it “the expectation phase”. This is where many people expect a change but are not quite sure when and it is this expectation that can be a driver for all manner of decisions.
We all know of course that there was never going to be any changes this month in the Bank of England Base Rate, nor in the amount Quantitative Easing, but there are still some interesting forces at play.
There are still some who believe there should be a further cut next year with a further increase in Q.E., whilst others believe that inflationary pressures, especially in commodity prices amongst other things, may mean that we soon see inflation rising faster than expected, which in turn raises the spectre of increased rates quicker than expected! It remains to be seen which group will be shouting “house” first.
As widely expected, the Bank of England have left base rate unchanged at the historically low level of 0.5%. Despite some speculation regarding Quantative Easing, the Bank decided to continue with the current £175bn programme, although a further £25bn later this year cannot be ruled out. The full article is published here
It seems to me that we are entering a crucial phase in our personal and economical development after the seemingly cataclysmic events of the past couple of years. It is time for us all to mature and move on, to accept the harsh lessons learnt, to let bygones be bygones if you like.
The blame game that has been going on for a while has now seen everyone from the government, the bankers, credit agencies, regulators, mortgage brokers, estate agents, the press, the general public, the Americans, the French!, or just men in general bearing the brunt for the credit crunch and ensuing recession.
Andrew Montlake, Communications Director at Coreco and ‘Mortgage Personality of the Year 2008’, gives his views — honest and no holds barred — on the latest developments within the mortgage and property markets.
