Monetary Policy Committee concerned over rising housing prices
The Monetary Policy Committee of the Bank of England has indicated that it is concerned over the effects of rising housing prices in the UK.
According to the minutes of the MPC's latest meeting, the panel is expressed that rising housing prices might affect the economy. It indicated that the central bank is unlikely to increase the monetary stimulus by a further £25 billion to take the total to £400 billion in its quantitative easing (QE) programme.
The Bank of England has said that the economy is expected to grow at a faster rate in the third quarter but said that it will resume the money-printing programme is the recoveryis effected. They also dismissed suggestions that Carney's new policy of "forward guidance" is a trigger for interest rate rises. The Bank expects the economy to grow by 0.7 per cent in the third quarter.
Meanwhile, Governor Mark Carney has confirmed reports that the banks might be ordered to put a limit on mortgage lending under the new rules for the sector. The Royal Institution of Chartered Surveyors has recommended placing a cap on the amount of money that can be lent by the banks as mortgages and the amount people can borrow in relation to their deposit or their income. These measures might be adopted if the housing prices rise above
5 per cent this year.