Stop rate cuts, argues BSA

The Building Societies Association is calling on the Bank of England not to cut rates until the impact of the latest rate reductions can be assessed.

The BSA says that although borrowers on variable rate cuts have benefited from rate cuts, the important issue now is to look after savers’ interests instead.

Adrian Coles, director-general of the BSA, says: “Mortgage availability, rather than the cost of mortgages, has become a more pressing issue over the last few months.

“This suggests that what is important to potential borrowers is maintaining the flow of mortgage funds to the market rather than reducing interest rates further.”

He adds: “We need to ensure that those with at least some capacity to supply funds for mortgage lending – personal savers – are encouraged to do just that.

“That requires the Monetary Policy Committee to refrain from making further cuts to bank rate at least until the impact of recent reductions becomes clearer.”