Tuesday, September 3, 2013
General election commentary
The UK looks set to repeat its traditional pre-election economic cycle which involves the incumbent government pumping up credit in the housing market. To this campaign the past Bank of England Governor made an offering of the Funding for (Mortgage) Lending Scheme and the new Governor has offered up â€œforward guidanceâ€ (for mortgage rates) and more recently this. The Bank of England will reduce the level of required liquid asset holdings. The effect will be to lower total required holdings by Â£90 billion, once all eight major banks and building societies meet the capital threshold. That will help to underpin the supply of (mortgage) creditâ€¦. But this time will be different!