One question: With everyone pointing the finger, who is most repsonsible for the current issues in the mortgage market?
Again, one question
Who is most responsible for the current issues in the mortgage market?
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5 responses from the Newspage communityCopy all
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I think a big round of applause needs to go to the Government and the Bank of England for completely obliterating the Mortgage Market. They have both dragged this issue on for far too long and have caused too much pain to homeowners and it is now completely unforgivable. Let's get this complete mess of a government out now. Why is it that the whole of the UK can see the problems but the UK government appear to be oblivious to it? I'd sooner sit through an episode of Love Island than watch the Government and BOE dismantle the country any more.
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A combination of cheap borrowing, an insufficient number of new homes being built, and a stamp duty holiday following the pandemic resulted in house prices soaring to unsustainable levels. Inflation increases have been caused by various external factors over which we have limited control, including the increase in energy prices. However, the government and the Bank of England's handling of the situation has been nothing less than negligent and they are equally culpable. The decision to raise the base rate from 0.1% to 5% in a short period was always likely to cause irreparable damage and has thus far had little to no impact on inflation.
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This one is easy- Andrew Bailey, the Bank of England bean counter. Bailey’s lack of vision is striking and it is clear he can only view what is under his nose. He must be clearly oblivious to the severe and protracted recession he’s setting up by leading his committee to increase rates again. It’s beyond satire that the government are meeting to try and mitigate the effects of these interest rate rises, which begs the question ‘what is their point?’.
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The Bank of England. Pure and simple, if they had moved faster and harder with rates in mid to late 2021 some of the pain that we are now experiencing could have been avoided in my opinion. Inflation was already increasing and quickly in July/August 2021 yet the Bank did nothing to raise interest rates at this point and ended up waiting until December 2021, even at that point only put the interest rate up by 15 basis points. Inflation at this point was already at nearly 6% so by then the horse had already bolted.
A sharp interest rate rise in late summer/autumn 2021 could have helped to avoid inflation becoming embedded and would have meant rates not having to rise as high as they are now predicted to. Everybody at the time could see that we had an overheating housing market yet the Bank of England appeared to be asleep at the wheel.
In the long term I do feel that Andrew Bailey will need to pay for this negligence with his job to get the financial markets trusting the Bank again.
A sharp interest rate rise in late summer/autumn 2021 could have helped to avoid inflation becoming embedded and would have meant rates not having to rise as high as they are now predicted to. Everybody at the time could see that we had an overheating housing market yet the Bank of England appeared to be asleep at the wheel.
In the long term I do feel that Andrew Bailey will need to pay for this negligence with his job to get the financial markets trusting the Bank again.
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The government and Bank of England are equally culpable in my view. Too much money printing during the pandemic has led to a massive increase in money supply chasing too few goods. Andrew Bailey and the Bank of England have been asleep at the wheel with regards to inflation. They've raised rates far too slowly and timidly, with the result that rates will probably need to go far higher than would otherwise have been necessary.