MPC member calls for 'aggressive rate cut'

News Category: Industry News

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David Blanchflower of the Bank of England's monetary policy committee (MPC) has warned that aggressive interest rates are required to avoid the UK experiencing a deep and long recession.

Speaking at Kent University this week, the MPC member said aggressive interest rate cuts are needed to help combat the worrying financial problems facing the economy.

Known as a proponent for strong base rate cuts, Mr Blanchflower said: "My view remains that interest rates do need to come down significantly and quickly."

He noted that many homeowners are being pushed into negative equity as house prices in the UK continue to fall and after the range of loan-to-value mortgage products has deteriorated amid the onset of the credit crunch.

Last month the Bank cut interest rates by 50 basis points to 4.5 per cent, a move which the MPC supported unanimously.

However, falling houseprices might provide a good opportunity for some landlords to add property to their investment portfolio.

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