The Federation of Small Businesses and National Institute of Economic and Social Research has called for rates to be left alone, but no-one has listened. Interest rates are so low that the Bank’s rate-cutting policy has become a blunt instrument.
There is a fundamental lack of liquidity in the market and so many government initiatives that their effectiveness is being diluted.
There seems to be a lack of understanding in the government and the Bank of the few simple measures that could encourage lending. What about a government guarantee for loans above a certain LTV, for example, or a national mortgage indemnity policy?
It’s time to stop playing with interest rates and look at measures that will give lenders and consumers confidence to try to regain some sort of normality.
Sales & Marketing Director