UK. Council of Mortgage Lenders calls for interest rate drop
Written on November 30, 2007
The case for the Bank of England (BoE) to lower interest rates or inject some kind of liquidity into the market is getting stronger as market conditions continue to deteriorate the Council of Mortgage Lenders (CML) has said.
In a report, the CML warned that wholesale markets are still dysfunctional and “funding pressures have started to crystallise for a number of lenders.”
It also says the inevitable effect of the current market conditions is that the availability of mortgage credit will be limited raising the overall cost for prospective borrowers.
“It is not inconceivable that when it meets next week, the MPC lowers official interest rates or acts in some other way to inject liquidity into the market,” the CML said.
Yesterday, the BoE announced that net lending to individuals dropped by 18.5 per cent in October to ?8.8bn payday loans. The number of loans approved for house purchases in October totalled 88,000 compared to 100,000 in September.