MPC vote may hint at status quo amid repossession fears

Homeowners concerned that they may face repossession might find they need to turn their attention to issues like inflation and job security more than …

Homeowners concerned that they may face repossession might find they need to turn their attention to issues like inflation and job security more than to the Bank of England's Monetary Policy Committee (MPC).

The reason for this is that the minutes of the latest meeting of the body have been published today (July 20th), indicating the committee is no nearer towards raising the base rate, something that will push up the cost of home loan repayments when it does eventually happen.

It was already known the body had voted to hold the base rate at 0.5 per cent, but the 7-2 vote was only revealed with the publication of the minutes.

And it again revealed Spencer Dale and Martin Weale were the only advocates of a tighter monetary policy, with the departure after the May meeting of Andrew Sentance reducing the numerical strength of this argument. His replacement Ben Broadbent has taken a doveish stance.

This being the case, it may be there is little likelihood of a major shift among the policymakers favouring the status quo anytime soon and the pressure placed on their position by the inflation rate has been reduced this month, with the Consumer Prices Index rate dropping from 4.5 per cent to 4.2 per cent.

Even so, with this figure still more than double the target level and running well ahead of pay rates, those who are finding it hard to pay their mortgages may find things getting tougher still. And with the economy recovery having slowed, some will fear for their jobs.

These factors may be more likely to leave some needing last-ditch help to stay in their homes than any base rate rise in the coming months.
 

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