Industry welcomes Banks forecast of rate cuts

Published: November 16, 2007

An industry body has welcomed a Bank of England report which indicated that interest rates could be cut by as much as 0.5 per cent by next summer.

Yesterday (November 15th), the Bank's inflation report hinted that interest rates might be cut in the first half of 2008 in response to the world's economic situation.

The National Association of Estate Agents (NAEA) welcomed the Bank's report and added that cutting interest rates would encourage more people to opt for mortgages and buy property.

Peter Bolton King, chief executive at the NAEA, said: "I'm delighted with the announcement made by the Bank of England … it is really encouraging to see that it has recognised the effects that the past interest rate rises has had on the market and indeed consumer confidence.

"The housing market has cooled and the past 12 months have left consumers looking for reassurance. A decrease in interest rates in 2008 will give consumers confidence and lead to a pick up in the housing market.

"We just hope that the government thinks carefully before introducing the next stage of Home Information Packs for one- and two-bedroom properties as this could potentially damage a market in recovery."

A report from Nationwide recently indicated that property prices in the country could stagnate in the coming year.