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London, 7th August 2013 - Bank of England governor Mark Carney announced today that the base rate of interest is set to remain at its record low of 0.5 per cent until unemployment falls to 7% giving a welcome boost in confidence to businesses and homes across the country.
Commenting on the announcement, Jon Neale, head of Research UK, Jones Lang LaSalle, said: “The Bank of England’s announcement that it will keep interest rates low will help boost confidence and build on the growing signs of recovery that have been evident in recent months. It will be particularly good news for the housing market. Mortgage availability has already improved thanks to Funding for Lending and Help to Buy, and this move may bring down the cost of fixed-rate products for those with smaller deposits. It will also give buyers some comfort that their payments will not increase sharply in the short term.”
“However, more importantly, the move should reduce the cost of loans to business, including construction and development, leading to greater activity in the key service and manufacturing sectors. This would provide a more resilient platform for the recovery. The resulting growth should incentivise larger businesses to invest some of their cash stockpile, take new business space and employ new staff. The recovery cannot be maintained purely on the basis of growth in consumer debt.”
Tim Vallance, lead director in Jones Lang LaSalle’s retail team commented: "Today's announcement to link future interest rate movements to employment is a welcomed 'win win' for retail. Certainty around cost of personal debt finance will provide a boost to confidence and to UK retail, until employment is back to levels to support further retail sales."
Emma Hollingshead - PR
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