Sentiment is a funny old thing. It can change like the weather but can produce very strong trends.

Alongside rafts of decent data we had growth upgrades and I wrote that whether you believed in a full UK recovery it is sentiment that would have a big hand in driving the market. Economists raise UK GDP forecasts.

That sentiment is starting to take off as first time buyers are now piling into the housing market. The Council of mortgage lenders today said that 68,000 first time buyers bought properties in Q2 2013, the highest quarterly number since 2007.

The average loan size increased to £117k in June from £112.5k in May. First timers were borrowing at an average of 81% LTV.

The housing market had been fairly flat over the last year or so but prices have been creeping up. As Jim has just pointed out, the BOE’s guidance on low rates is likely to lead to further increases in house prices and borrowing in general. While we need the confidence in the economy to get spending and borrowing moving we risk falling back into the ‘easy debt makes growth’ scenario which caused the problems in the first place. We don’t want to be creating another time bomb where the population gets slammed back into financial trouble when rates start going up.

If Carney is really worth his salt he will have one eye on the mortgage/house market and will be ready to fight any problems in advance, even if he has to fight the government to do so.