View more on these topics

Katrina ripples will affect base rate

National Australia Bank is predicting that the Bank of England’s Monetary Policy Committee will opt to ‘wait and see’ when it comes to September’s base rate decision.

The bank cites the devastation caused by Hurricane Katrina in New Orleans as a factor that will push up oil prices and says this will be one reason the MPC will not change rates.

Tom Vosa, chief executive of NAB, says: “With the August vote to cut rates far closer than expected, it is doubtful we will see more changes until 2006.

“Also, recent data casts doubt on whether the UK economy is slowing as much as suggested.

“The 0.5% growth reported by National Statistics in the second quarter is a small but significant step up from the 0.4% pace seen between January and March.”

Vosa adds that the housing market seems to be stabilising and though house prices continue to trade sideways, activity is picking up with mortgage approvals reaching a 12-month high of 97,000 in July – above the long-term average.

F&C Asset Management is also concerned about the repercussions of Hurricane Katrina. It says the estimated US$25bn worth of damage will cause problems with oil supply and distribution which will push prices to record highs.

F&C says the rise in the oil price will affect consumer spending and aggregate demand at some point, and could lead to higher inflation.

Recommended

I want a simple illustration from the BMS website

From Sean Horton Back in April I needed to produce a BM Solutions KFI for a client so I went to its website looking for the KFI button. After clicking around for a few minutes it became apparent that the only way to get a KFI was to complete a DIP. I did not wish […]

OFT issues guidance to combat unfair tenancy terms

New guidance on how the Unfair Terms in Consumer Contracts Regulations apply to tenancy contracts has been issued by the Office of Fair Trading to help landlords provide clear and fair contract terms to their tenants.The OFT receives more than 200 complaints every year about unfair terms in standard tenancy contracts, such as financial penalties, […]

Burton joins Mortgage 2000

Mortgage 2000 has appointed Chris Burton to the position of mortgage product manager. He will be responsible for ensuring a constant flow of competitively priced exclusive products designed to both compliment and improve upon the generic ranges offered by the lenders for each of the Mortgage 2000 channels m2-mortgage club, m2-d&p, Casemaster and m2i. Burton […]

Berkley Alexander launches age-banded MPPI

Young people are set to benefit from the launch of the first fully age-banded Mortgage Payment Protection Insurance solution incorporating a three-month initial payment holiday. Launched by Berkeley Alexander, MortgageLIFELINE can cut the cost of MPPI cover by almost 40% for a 30 year old.While traditional MPPI policies are flat-rated for premiums, a one size […]

Newsletter

News and expert analysis straight to your inbox

Sign up