Bank of England Says Housing Market Does Not Need Further Funding

The Bank of England said on Thursday that it would heavily scale back a scheme launched last year to boost mortgage lending, as house price inflation looks set to accelerate further.

Britain’s economy has staged an unexpected turnaround since the BoE launched the Funding for Lending Scheme with Britain’s finance ministry in July 2012 to help increase lending to home-buyers and businesses.

The scheme will now focus solely on enabling greater lending to small firms that still find it hard to borrow.

“Although the growth in household loan volumes remains modest, activity is picking up and house price inflation appears to be gaining momentum,” BoE Governor Mark Carney said in a letter to finance minister George Osborne, who backed the move.

Earlier this week Carney faced questions from lawmakers who are worried that a house price bubble is in the making, and that Britain’s economic recovery is hampered by a lack of lending to small firms.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza