The ruckus over the decision by Alliance & Leicester and NatWest to restrict mortgages in areas wher...
The committee pointed out that there may be a significant financial hangover on the way because most people borrowing on the basis of low interest rates do not yet realise that they are also in a low inflationary environment.
The MPC fears that borrowers are "ignoring the fact that the real burden of the loan would no longer be eroded to the same extent by inflation as in the past. If that were the case, adjustment to this misperception might take some time".
The problem with deflationary pressures are that they cause the core value of a loan to remain higher for longer than in an inflationary environment.
Inflation does the opposite, causing the value of a loan to disappear over time.
The issue has been a significant problem in Japan, where banks are carrying bad debts that are equal in value today or even more so than at the time they were taken out simply because deflation during the past several years has made the value of the loans greater relative to other prices in the economy.
In the UK a similar situation occurred during the early 1990s when consumers found themselves with negative equity because housing prices collapsed.
The CML says it shares the MPC's concerns given the low interest rates and the propensity for some mortgage customers to overextend themselves.
"The CML would certainly share the view that with debt-servicing costs so low, most mortgage borrowers will see 'affordability' as very positive currently - despite the fact that loan-to-value and loan-to-income ratios are not particularly low by historical standards," a spokeswoman says.
"There is theoretically some risk that borrowers might not factor in the possibility of mortgage rates rising - although lenders' affordability models will allow for this, and borrowers will not be able to borrow the maximum they might think they can 'afford' now, because of this risk.
"I don't think the main issue is about mortgage lending affordability models, but about the extent to which households may be taking on other high levels of unsecured debt alongside the mortgage, which in the event of a financial 'shock' could leave them exposed."
Despite the misgivings by the MPC and the CML, it is highly likely that UK consumers are still, however, going to be mesmerised by the repo rate remaining at its historical low of 4%.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till