Contrary to reports, the CML Director General did not give an interview to the Sunday Telegraph, let alone one suggesting that interest rates need to double or are likely to double. In fact, the CML believes that base rates are likely to end the year at around 5.25%, and end next year at around 5.5%. The CML expects house price inflation to end this year at around 14%, and next year at around 8%.
Michael Coogan, CML Director General, commented:
"Our forecasts article observed that if the MPC specifically decided to target house price inflation and bring it down to single digits immediately, then interest rates would need to double. This was only ever designed as a hypothetical observation – we do not want it to happen, nor do we believe that it will. But it has become a media story that has spun out of control – and it is now time for it to stop. Real people make real financial decisions based on what they read and hear in the media – we want to make quite clear that they should be expecting a moderate rise in rates, not a doubling."
