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UK OPENING NEWS INCLUDING: Mortgage rates may hit 14% within two years
Britain faces the risk of sliding into recession and the central bank’s growth forecast for this year and next may be too optimistic, according to Martin Weale, the newest member of Bank of England’s Monetary Policy Committee. (Times)
Some economists cast doubt on the BOE’s relaxed attitude to the economic effect of the government’s planned spending cuts, the Financial Times reported, citing a meeting last month of the monetary policy, which the central bank uses to apprise itself of external economists’ opinions. (FT)
It was pointed out at the event that there’s virtually no room for monetary policy to offset public spending cuts, and at the same time, governments around the world also plan to cut spending, the newspaper said. The Bank has forecast 2.8% economic growth in the UK next year; the average prediction by independent economists is 2%.
Mortgage rates may hit 14% within two years. (Telegraph)
It would be the first time that mortgage rates have reached this level since the recession of the 1990s. The warning comes after a leading think tank warned that the Bank of England may have to increase interest rates sharply – to as high as 8% - to choke off soaring inflation. Once lenders have added their profit margins, it could push the rates offered to home owners to 12% to 14%, according to personal finance website Moneyfacts.
Tories in secret talks with unions as threat of autumn strikes looms. (Independent)
Cameron to welcome TUC chief to No 10, while ministers try to heal rifts of Thatcher era
