- Seeing financial risks from rising debt
- Doesn’t see immediate risks from household debt
- Want to be alert to act on any risks before they happen
- Indirect risks such as mortgages are the single biggest risks to the UK economy
- “Responsible” cna turn to “recklessness” quickly
- FPC is concerned that loosening in mortgage underwriting standards and increase in household debt could pose a major risk
- Measures detailed in the report should not constrain housing activity but will bite if there is a sustained momentum in housing market
- It is not the FPC’s role to control house prices
- The measures will help prevent a slide back into riskier lending and higher debt
- Macroprudential tools are new for UK
- BOE is striking the right balance for the housing market
- Monetary policy does not need to be diverted to address a sector specific risk in the housing market
- Actions today won’t affect the central outlook for the economy, are less likely to have implications for monetary policy path which anticipates limited and gradual rate rises
On to the Q&A
Cable’s bounced up to 1.7030 and that’s on the assumption that any of the tools they are putting in place for housing won’t be negatively affecting the path of monetary policy and should limit any risks to the economy
