Another base rate decision last week and, as another 8-1 vote kept rates on hold for the 78th month in a row, at least they are generating a little more excitement now.
Although there is some nervousness over China potentially causing a global slowdown, Carney is still adamant that its travails will not serve to knock the Bank of England’s plans out of kilter – despite a passing comment that the UK is not “immune” to a slowdown triggered by China.
So it is now all eyes on the Fed in the US and its potentially monumental decision on whether to increase rates. The UK has usually followed the US in terms of interest rates so, if it moves this time, expectation will grow here.
While the probability of the Fed leading the way in September is at 28 per cent, things are looking better and the real question is whether the economy as a whole, here and there, is finally ready to take that first, tentative step.
Many think it is and some believe both the UK and the US are in danger of ending up behind the curve if they do not at least start to increase rates soon, leaving them in danger of losing all credibility and being forced into more drastic action down the line.
Meanwhile, the Council of Mortgage Lenders says the UK housing market is “dysfunctional”. It says it is not the answer to just build more homes but that the current stock is not being used in the best way, such as “a huge degree of under-occupation”. Until we get that joined-up housing plan, I fear things will get worse.
In the markets, three-month Libor is back at its favoured 0.59 per cent while swap rates have eased a spec.
2-year money is up 0.01 at 1.04%
3-year money is down 0.01 at 1.24%
5-year money is down 0.03 at 1.55%
10-year money is down 0.04 at 1.93%
The biggest news this week is from NatWest with two juicy releases. First, it has returned to the interest-only fold, which is great news. Deals will initially be available to applicants with a single income in excess of £100,000 up to 75 per cent LTV. They will allow sale of property to 50 per cent LTV, which can be topped up to 75 per cent LTV on repayment. There needs to be at least £200,000 of equity at the end of the term.
Second, NatWest has reviewed its buy-to-let criteria to allow applications from professional landlords who derive more than 30 per cent of their income from rental properties. It has also removed the maximum loan limit of £500,000.
Nationwide has new 95 per cent LTV products: a two-year fix at 3.99 per cent, three years at 4.59 per cent and five years at 4.79 per cent with a £999 fee, £500 cashback for first-time buyers and a £250,000 maximum loan.