Bank of England Keeps Current Rates
- May 09, 2008
London–The Bank of England left interest rates unchanged at 5 percent on Thursday after determining that the risk of inflation was too large to reduce borrowing costs, the Guardian said.Speculation had been rampant that the bank would echo April’s quarter-point cut to help ease the rough housing market.Mortgage approvals in the U.K. are almost half the 2007 level, and home permits have fallen by two-thirds. Declining home prices and lower consumer confidence could lead to less consumer spending, economists fear.”The housing market has come to a standstill, but there’s no shortage of buyers, just a shortage of mortgages–which is now impacting the wider economy,” Nicholas Leeming, of propertyfinder.com, told the Guardian. “Inflation remains a threat, but further immediate intervention, as well as future rate cuts, is now essential to stimulate lending, the housing market and the economy.”The government is scheduled to announce a plan to help troubled homeowners on Friday.