Britain’s housing market could turn ‘from lukewarm to scalding hot in a few economic seconds’, the Bank of England has warned.
The Bank’s chief economist, Spencer Dale, said the housing market was like a microwave that could easily overheat.
In a speech to business leaders, Dale said the Bank would not hesitate to act to prevent a house price bubble.
He said: “A healthy housing market is good for our economy and supports the recovery.
“Most importantly, it will underpin further increases in house building, which has played an important role in driving the economic growth we’ve seen this year and which, as a nation, we need to see.
“But let’s not be naive. Anyone with more than a passing interest in British economic history is aware that the UK housing market has a sort of microwave-type quality to it, with a tendency to turn from lukewarm to scalding in a matter of a few economic seconds.
“The Bank is fully aware of this risk.”
Dale stressed that the Bank was not looking at an early rise in interest rates, and suggested they could stay low even when unemployment falls to 7%.
The Bank’s Monetary Policy Committee has said it will consider raising interest rates once unemployment falls to that level.
Comments
Check this out regarding Lukewarm Market
http://business-tantra.blogspot.com/2014/01/lukewarm-market.html
More words from a BOE spokesman saying nothing
“A healthy housing market is good for our economy and supports the recovery." define healthy?
“The Bank is fully aware of this risk.” but "Dale stressed that the Bank was not looking at an early rise in interest rates, and suggested they could stay low even when unemployment falls to 7%."
He might as well have said we are not going to do anything and ended his speech.