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Stuart Law, Chief Executive of Assetz, Urges Bank to Drop Interest Rates

9th January 2008 | back to article listings BACK    print this article PRINT

“In spite of some welcome market positivity provided by the latest Halifax figures, the Bank of England’s Monetary Policy Committee (MPC) must remain on the course it set out with its 0.25% drop at the end of 2007, to ease the pressure on homeowners and help to bring more buyers to the market in 2008.

“Base rates still need to come down to at least 5%, which we have always maintained is the neutral level required for this year. This will need to be done sooner rather than later if the Bank is to make positive steps towards improved liquidity in the market, and avoid more drastic cuts later in the year.

“I expect far more insight and leadership from the Bank in the form of pre-emptive action during 2008. It has now started to follow the example set by the US and Europe in offering liquidity and by dropping base rates, but we urge serious consideration of a 0.5% drop this week to help the economy stay on an even keel.

“Inflation is not currently an issue and should not present a reason for delaying rate cuts. It is likely to be announced next week as being around 1.9% for 2007 as a whole. This is below its 2% target due to a weak December in the retail sector, and the Bank should take the opportunity to focus on helping the economy for the time being rather than concerning itself with inflation risk.”


 

 

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/3974.html. Alternatively, please see our full press release archive.

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