Press Release Summary: The Council of Mortgage Lenders has urged the Bank of England to consider a cut in the base rate of interest.
Press Release Body: London (Longdogfinance) December 3, 2007: The latest report from the Council of mortgage lenders says that lenders' ability to borrow funds from other financial institutions is getting worse. It has requested the Bank of England to reduce its interest rate to boost their finances.
The Bank of England's Inflation Report in November made a case for at least two reductions of 0.25 per cent in the next year. However, the council of mortgage lenders feels that the Bank should consider reducing the rates much sooner.
Similar reaction has been received from one of the Bank of England's policymakers David Blanchflower. He was quoted as saying that interest rates need to fall now though he was of the view that it requires a delicate balancing act. Blanchflower said: "Certainly there has been some evidence that people have been taking on mortgages they cannot afford. They have taken these on in the expectation that prices will rise. I am concerned there will be hardship ahead for some."
There is a possibility that mortgage lenders would not be able to lend money next year, if they cannot borrow extra funds from the market. Some of the building societies have started offering 7 per cent interest rate on savings to attract more funds from the market.
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