First-time Buyers
Prepare for rate hike over next two years, says MPC’s Miles
It is “not unreasonable” to anticipate a 2% base rate as early as 2016, but increasing rates is still considered a last resort to tame the housing market, according to Bank of England policymaker David Miles.
Miles, a member of the Bank’s Monetary Policy Committee (MPC), said it would exhaust other measures before acting to up rates from their historic lows of 0.5%.
“In terms of a generalised overheating housing market, I don’t think that’s a good description of where we are,” Miles told Bloomberg TV.
“If you did get into a situation where the tools that the Financial Policy Committee have seem not up to the job of stopping overheating in the housing market, we would then turn to the blunter instrument of using Bank Rate. We’re a long way from that.”
Miles added house price measures were being distorted by big swings in the South East and London.
