House builders demand rate cut
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House builders are calling for the Bank of England to cut interest rates by 1 per cent to revive the housing market.
The Home Builders Federation has made the call ahead of the bank’s monthly Monetary Policy Committee meeting, where interest rate decisions are made. The MPC cut rates by half a per cent last month, but the HBF believes further cuts are needed.
The committee is expected to announce its decision on Thursday.
Stewart Baseley, executive chairman of HBF, said: ‘Action from the bank is needed if we are to break the vicious downward spiral of sharply lower mortgage lending, falling housing transactions, falling prices, declining home buyer confidence and a worsening economic outlook.’
Figures from the Chartered Institute of Purchasing and Supply suggest construction has reached an all time low, driven by the lack of house building.
The CIPS/Markit UK Construction Purchasing Managers’ Index stood at 35.1 for October. Gemma Wallace, economist at Markit, said: ‘Considering the data, the chances of a near-term recovery are looking increasingly slim.’
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