Commenting on yesterday’s Base Rate decision he said: “Increasing the QE programme beyond the level previously agreed by the Treasury is a very clear indication that the MPC still has major concerns over the state of our economy… The comment in the MPC’s statement that “In the United Kingdom, the recession appears to have been deeper than previously thought” is very relevant.”
However, he did have good news regarding house prices. “The housing market is continuing to improve, with Nationwide’s real, ie non seasonally adjusted, index now showing a rise of 3.8% in the first 7 months of this year. With confidence returning to the housing market, and despite the obvious problems such as more large increases in unemployment to come, lack of mortgage finance and in particular lenders’ lack of appetitie for higher LTV lending, I now expect house prices to show an increase of at least 5% this year.”
