AMI is warning that this will not address the real issue in the UK mortgage market. AMI is instead calling for government to focus on the availability of money in the economy to provide much needed liquidity.
Robert Sinclair, AMI Director, said: "AMI and its members continue to be disappointed at this focus on cutting rates, which has a limited short term impact on most borrowers. The most economically vulnerable do not have mortgages and many on fixed rates will not see benefits for some time. Savers continue to suffer under this blunt instrument.
"While these cuts will help larger businesses with base rate linked borrowings, this remains a distraction from the lack of availability of money. Banks and Building Societies still do not have enough to lend. This lack of confidence within the whole system needs resolving.
"We would like the MPC and commentators to focus much more on the liquidity issues facing the country and on the availability of Bank Lending. We urge the MPC to take action with the Treasury and recognise the difficult position we face regarding both narrow and broad money supply. We also wonder if the restricted UK statistical measures are still relevant when set against the wider range of measures used by both the US and the European Union."
