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Top lenders disagree with CML call for rate rise

Some of the UK&#39s biggest lenders have washed their hands of the CML&#39s unprecedented call to increase interest rates after it made the move without consulting members.

HBOS, the biggest lender with a 24.8 per cent market share, says it was “very surprised” by the call to increase rates now to avoid bigger rises in the future.

Halifax group economist Martin Ellis says: “This is not something we back. We do expect rates to increase but we are not asking for this. The Bank of England has to consider a lot of things and the buoyant housing market has helped the UK avoid recession.”

The second-biggest lender, Abbey National, says although a rate rise would be welcome if it achieves what the CML suggests, it believes the most important factor in the buoyant housing market is responsible lending.

Third-biggest group Barclays Bank is convinced that market forces will lead to prices levelling off.

Analyst John Wriglesworth says: “The CML has dumbfounded me, unless they have reason to believe that the Government is going to do something more drastic and is trying to pre-empt this.”

CML spokeswoman Michelle Vosper says: “Members were not involved. It was a decision made by the secretariat of the CML. Lenders have different views but we feel more are comfortable with this view than not.”

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