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Coogan claims he was right to call for rate rise

CML director general Michael Coogan has defended his unprecedented call in June for the Bank of England to hike interest rates despite opposition from the biggest lenders.

Speaking at last week&#39s CML annual dinner, Coogan admitted he “risked making himself the most unpopular person in the industry” in the summer when he declared that an increase from 4 per cent would make the housing market more sustainable. Lenders such as the Halifax said they did not back the call.

At the dinner, Coogan said keeping rates at a status quo has now led to the inflationary pressures he anticipated from equity withdrawal and house prices have accelerated rather than slowed.

He said, despite a boom year for CML members, with lenders, and consumers, rarely having it so good with the lowest mortgage rates for decades and the best lending opportunities for years because of high demand, he still sees reason to complain about the rate issue.

Coogan warned lenders and borrowers that the boom will not last forever and they should prepare for the downturn as the CML is predicting a big slowdown in house price growth. Describing consumer confidence as a “fickle beast”, he said the industry must be aware of the consequences of its comments and actions.

He said: “The other person who made a similar suggestion on interest rates at that time was Mervyn King and he got promoted as a result.”

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