4
Aug
Cut rates, says former minister
Former cabinet minister John Redwood has argued that the Bank of
England should change tack on monetary policy if it wants to see
the mortgage market recover.
Mr Redwood, who was secretary of state for Wales in John Major's
government before resigning to challenge for the party leadership,
argued in City AM that it was impossible to simultaneously bring
inflation down and boost the market, observing that house prices
were being pushed downwards by interest rate policy.
He also commented: "The Bank of England needs to realise that
keeping interest rates too high is preventing a housing recovery,"
adding that it is also "damaging" for the mortgage market that
nationalised Northern Rock is not being allowed to increase its
mortgage book.
The former minister's views are not the only ones suggesting a base
rate cut should come soon.
Discussing the state of the economy as the first anniversary of the
start of the credit crunch is marked, banking analyst at MF Global
Mamoun Tazi told the Independent the speed at which the UK economy
will bounce back "depends on whether the government puts in place a
package to stimulate the economy and cut interest rates".
