The Bank of England yesterday voted to keep interest rates at 5 per cent as the housing market continues to slump. The Bank’s announcement was accompanied by figures released by the Halifax showing that house prices have fallen by 10.9 per cent over the past year, whilst the average property price for a Halifax approved mortgage in August fell by 1.8 per cent. The bank’s decision to hold interest rates came as no surprise as the tug of war between inflationary pressures and a weak housing market continues.
Further bad news was announced by the Society of Motor Manufacturers and Traders on Thursday, who revealed unimpressive new car registration figures for August. However, with both the car and housing markets underperforming, many experts are forecasting a series of interest rate cuts later this year.
Whilst that decision would be popular among hard up homeowners, some experts have urged caution from the Bank of England with inflation running at twice the target rate and import prices rising as a result of the weakening pound.
Bank of England Holds Interest Rates
Bank of England Holds Interest Rates
Fri, 05 Sep 2008
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