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Pause in rate cuts is ‘missed opportunity’

The Council of Mortgage Lenders says it is disappointed the Bank of England’s monetary policy committee did not cut base rate last week, failing to anticipate worsening economic conditions.

The MPC voted to maintain rates at 5 per cent after last month’s 0.25 per cent cut.

CML director general Michael Coogan says: “We understand the conflict between slowing economic growth and rising inflationary pressures and the uncertainty over some of the data reflected in the split views of MPC members last month. However, the MPC had an opportunity to act to anticipate the worsening economic environment today and it is disappointing there has been no change.

“Mortgage and housing market conditions will remain challenging for the rest of this year but the majority of existing borrowers are coping well. Anyone in financial difficulty should contact their lender or a debt adviser.”

Royal Institution of Chartered Surveyors chief economist Simon Rubinsohn says: “We are disappointed that the MPC chose to leave the base rate on hold. RICS appreciates the risks associated with the recent pick-up in inflation and acknowledges the danger of it moving into letter-writing territory during the second half of the year but the tone of recent data and surveys suggest that the threat of a sharp economic slowdown is the more pressing issue for the authorities.”

John Charcol senior technical manager Ray Boulger says: “This pause in the programme of rate cuts will allow the MPC time to assess the impact of its special liquidity scheme available to banks and five building societies before deciding on the scale and timing of further cuts.”


Doesn’t treating customers fairly apply to life offices?

I recently stumbled upon a piece of paper from Friends Provident which read: “As part of our policy to treat all customers fairly, we are upgrading our contracted-out policies to be more in line with stakeholder. As a result of this, we have capped commission at a maximum level of 2.5 per cent for all rebate contributions received after April 6, 2005.”

Daydream believers

Last week, I looked at the new day counting provisions for determining the matter of UK residence. A number of cases have been heard on this issue recently. The most well publicised has probably been the Gaines-Cooper case but there have also been a couple concerning airline pilots. One was Grace v HMRC and the other was the Shepherd case.

Advisers demand tele-underwriting

Advisers will stop using protection providers that do not offer tele-underwriting by qualified nurses, warns CBK Colchester principal Peter Chadborn.


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