The Bank of England (BOE) today kept their rates at 5%. The decision had been widely expected, despite calls from business groups to cut borrowing costs.
The BOE reduces rates as a way to control the economy. I was asked the question today from a colleague what I thought about forcing the lending banks to follow suit if the BOE had reduced their rate.
It is often the case that the lending banks keep their inter-bank rate high when the BOE has reduced rates and the two are not necessarily linked, this then negates the effect of the rate cut.
The BOE based their decision on what is the best for the country as whole, whereas the lending banks have their own business issues to to consider. I believe that market forces will usually win through and this will correct itself base. Do you agree?
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It does not matter if other banking firm would follow BOE the housing crisis is something which might not be avoided with the increase of inflation I do not believe there is nothing much could be done to help house buyer . Housing developers need to follow how Australia open their property market to international ownership. I believe this is a golden opportunity to those in property business to be able to grow their business.
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