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Property Experts Call for Cut in Interest Rates

Property Experts Call for Cut in Interest Rates Surveyors and estate agents have called on the Bank of England to consider a cut in interest rates.

Although the Bank’s Monetary Policy Committee recently announced that the base rate will remain at 5 per cent for now, the Royal Institution of Chartered Surveyors (RICS) called for a cut later in the year to boost consumer confidence.

RICS chief economist Simon Rubinsohn conceded that the committee’s decision to keep rates at 5 per cent last month was "understandable”.

However, he argued that “the deterioration in both business and consumer sentiment will justify an easing in policy later in the year".


The National Estate Agents Association (NAEA) also argued that a cut in interest rates would have a beneficial effect on consumer confidence.

NAEA chief executive Peter Bolton King said: "We understand that there are significant pressures on the wider economy at this time.”

He went on to encourage the Bank of England not to increase interest rates but to decrease them as soon as possible.

The NAEA has also called on the Government to look into the possibility of stepping up funding for the mortgage market to kick-start the stalled sector.


Mr Rubinsohn warned that hard-pressed consumers who are struggling with higher food and fuel costs are unlikely to see a fall in inflation any time soon. This will also have a knock-on effect in that those trying to get debt free again will find it harder to find the funds to make the necessary repayments to deal with those debts.

He warned: "There is, at this stage, very little evidence of second round effects from the jump in food and energy costs.”

His warning seemed to be borne out after official figures showed inflation rise to 3.8 per cent this month, mainly due to higher grocery bills and petrol costs.

Gas and electricity companies have also warned of further price rises.

Remortgage News posted on 06 August 2008

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