Mortgage lending 'must be restored' says Bank governor
Governor of the Bank of England Mervyn King has said that the most
important element of policy for the Bank and the government is to
ensure that the levels of lending and borrowing increase.
Speaking to the Treasury select committee at Westminster following
the pre-Budget statement, Mr King said the most "pressing" priority
is "to ensure that normal bank lending is resumed".
Without this the economic situation could get a lot worse, he
This may amount to a hint that should other measures fail, the
monetary policy committee (MPC) could lower interest rates again to
encourage consumer demand for mortgages.
The governor also said that the VAT cut announced yesterday will
have a short-term downward impact on inflation.
Earlier this month official figures showed the consumer prices
index inflation rate to be falling, down to 4.5 per cent last month
from 5.2 per cent in September.
The MPC will decide on December 4th if another rate cut is