Bank called on to cut interest rates

The chief executive of the property investment firm Assetz has called on the Bank of England to introduce a reduction to the base rate of interest, it has emerged.

Stuart Law insists that a 0.5 per cent cut in the cost of borrowing is required to enable a degree of recovery of the housing market, which is suffering as homeowners struggle to find loan deals and cope with their debt management burdens.

Mr Law is also convinced that if a base rate reduction is brought in by the bank, it will need to be passed on by financial service firms to consumers if the property sector is to recover in months to come.

“The Bank of England urgently needs to reduce interest rates this month,” he said.

“It cannot ignore the very real and present danger of the credit crunch and must not hide behind the recent spike in inflation as an excuse to delay this much needed cut.”

David Kuo from price comparison firm Fool.co.uk suggested recently that more and more homeowners are likely to find it difficult to sell their property as the housing sector slump worsens throughout 2008.

Written by Dan Mather