Mervyn King backs Alistair Darling

Grovelawn Financial News 25/11/2008

← Rates cut on current accounts | News For November 2008 | Credit card companies sign up for fairer terms →

Base rate cut could be on the way

The Governor of the Bank of England hinted that the base rate could fall again. Mervyn King said that the lack of lending by banks to consumers and businesses was the most important factor in the current climate of frozen credit and low lending levels to borrowers.

A Treasury Select Committee of cross party members heard Mr King say “I am in no doubt that the single most pressing challenge to domestic economic policy is to get the banking system to get lending in any normal sense. That is more important than anything else at present”. He suggested that UK banks could have their capital adequacy rules relaxed to help ease lending conditions.

He has also refused to rule out full nationalisation of the banks and he warned that a continued reluctance from banks to lend would lead to a deflationary spiral and that they economy would shrink with inflation lowering. He also championed Alistair Darling’s Pre Budget Report saying that he felt the measures seemed reasonable given the “extraordinary circumstances”.

← Rates cut on current accounts | News For November 2008 | Credit card companies sign up for fairer terms →

The information contained within these news articles may include reference to taxation, legislation, regulation and other issues or concerns that may no longer apply.

Your property may be repossessed if you do not keep up repayments on your mortgage.

For more information on how we are paid for mortgages please click here.

Grovelawn Financial Services, Gemini House, Hargreaves Road, Swindon, Wilts, SN25 5AZ — T: 0845 458 2633 — F: 01793 706 533 — E: enquiries.ignore@grovelawnfinancial.remove.co.uk