No rise in MPC support for rate cut
Anyone hoping to see a base rate cut in the hope of getting a cheaper mortgage to buy a London property may have seen such hopes dwindle today as the minutes of the September meeting of the Bank of England's Monetary Policy Committee (MPC) showed no rise in support for a cut.
David Blanchflower maintained his consistent support for a 0.25 per cent cut, but remained the only member to do so as the other eight voted to hold the base rate at five per cent.
One change from before was that Tim Besley, who voted to increase the rate in July and August, abandoned this position, something that may all but eliminate the prospect of a rate rise.
However, in the wake of yesterday's news of a fresh rise in inflation, ING economist James Knightley said concerns over "secondary" inflation effects caused by high expectations could make the MPC more wary about cutting.
He stated: "This suggests to us that we will need to see a marked deterioration in financial market conditions to get a near-term rate cut."
Such a situation may persuade many that renting is a better option than buying at present.
Published 17th September, 2008
© 2008 Estates IT Limited
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Anyone hoping to see a base rate cut in the hope of getting a cheaper mortgage to buy a London property may have seen such hopes dwindle today as the minutes of the September meeting of the Bank of England's monetary policy committee (MPC) showed no rise in support for a cut.