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Members disagree with CML&#39s call for higher interest rates

The CML was branded “foolish” by its own members last week for calling for a rise in interest rates.

Lenders quickly moved to disassociate themselves from comments by CML director-general Michael Coogan, which called for a “modest rise in interest rates to ensure that the housing market is sustainable for the future”.

Tim Fletcher, sales and marketing director of Home Loan Management, says he was “stunned” by the CML&#39s remarks.

He told Mortgage Strategy: “It is foolish, since the housing market is really a question of confidence, which is either there or not.”

Nationwide was also unhappy with Coogan&#39s remarks. Alex Bannister, chief economist at Nationwide, says: “In terms of lobbying, the CML is a body that comes up with a consensual view of the lending market. I do not believe what was written was a consensual view based on what lenders asked the CML to say.”

And Eddie Smith, director of business development at Verso, says: “All indicators show a stable housing market, and artificially moving the rate upwards will lead to further rate increases much quicker than is needed.”

But the CML did find support in Halifax. Mark Hemingway, head of media relations, says: “The CML is quite within its rights, no problem at all. It&#39s not as though we&#39re actively clamouring for rates to go up, but we&#39re quite comfortable with the comments.”

•Chancellor Gordon Brown last week indicated he would support the Bank of England if it hiked up interest rates. Delivering the annual Mansion House speech in London, Brown told the audience there would be “tough choices to make in the coming months to ensure sustainable growth”.


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