Base Rate remains at 0.5%

09 July 2009

The Bank of England have kept base rate at 0.5% for the 4th month in a row and opinion is that it may stay at this level well into 2010.

The BoE are also continuing with their £125billion quantitive easing programme in an attempt to get the banks to start lending again.

However, public opinion is that things are not improving with the Britich public furious that bank and building societies appear to be preventing home ownership, as revealed in a poll commissioned by the National Association of Estate Agents (NAEA)

The independent survey of 1800 people found that 58% believed banks must begin lending more if the UK is to pull out of the proeprty slump.

22.5% said that they were unable to find a mortgage that they qualified for anywhere in the market and 56% believed that a combination of relaxed restrictions and lower deposit requirements would increase the chance of them buying a property. 

Peter Bolton King, chief executive of the NAEA, warned that banks risked stifling the market's recovery and that the Government should pressure them into lending. 

He said: "We cannot let the banks convince us that shutting up shop when it comes to mortgage lending is a responsible move.  The decision to restrict mortgages so severely is rooted in self interest.  The Government must do more to put pressure on those banks that are refusing to lend, while highlighting those banks that are easing restrictions to help get the economy moving again.  It is time to accept that responsible lending to responsible people is necessary for teh country. 

"It is no secret that many people consider bankers to be responsible for the mess the economy is in.  The very least they should do is to take appropriate steps to help us to recover"