In the face of mounting media speculation, Bank of England governor Mervyn King last week claimed that the outcome of this Thursday’s Monetary Policy Committee meeting is not a done deal.Try telling the pundits that. Most seem positive that a 25 basis point rise is a certainty and that the market will be under the shadow of a 5% base rate by Christmas. King’s assertion that despite inflation being above target the decision could go either way has fallen on deaf ears. Most are certain of a hike and they aren’t happy. The main concern is that it could dent consumer confidence. David Bexton, managing director of smartnewhomes.com, echoes many when he says: “I strongly urge the BoE to carefully think about the implications before raising rates this month.” But more worrying in the longer term is the implication that the BoE could be flying blind due to a lack of reliable data collected by the national census. King has criticised the lack of data on the size of the country’s workforce, scale of unemployment and earnings growth, and has called for more funding for the next census. The government’s measure of inflation also came under attack from King, who slammed the Consumer Price Index for not including house prices. Although Eurostat, which is responsible for EU statistics, is conducting an experiment to see how it could bring housing back into the national measure King warns this is unlikely to happen in his lifetime. This is a sad statement and perhaps an insight into why the government thought Home Information Packs were a good idea. A lack of joined-up thinking based on imperfect information has been one of the hallmarks of the Labour government. But the picture of the housing market at the moment, based on figures from the Council of Mortgage Lenders among others, shows prices continuing to rise. It seems a good bet the pundits are right and that the BoE will slam on the brakes sooner rather than later despite King’s protestations.
- Top trends
- Top trends
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