HBOS, the UK's biggest mortgage lender, has shocked the City with the admission that it had lost its battle to stop customers joining rivals for better deals during the first half, reports The Times.
The owner of the Halifax said its share of the net lending market was poised to fall below 10 per cent.
The slide in its mortgage market share means HBOS will be leapfrogged as the number-one mortgage lender by Spanish-owned rival Abbey, which holds about 11% of the market. Abbey, owned by Santander, has embarked on an aggressive campaign to win market share in the UK.
The dramatic disclosure by HBOS, which claims a "natural" share of the mortgage market of as much as 20 per cent, sparked a 4% drop in its share price in early deals, down 40p to 1030p.
THE BANK OF ENGLAND will be forced into further increases in interest rates to control inflation unless capacity pressures on the economy abate and firms rein in hopes of increasing their prices, Mervyn King warned last night, reports The Guardian.
In a speech in Cardiff, the Bank's governor stressed that last week's decision to hold rates at 5.5% may not spell the end of increases and the monetary policy committee could be forced to act again.
PROPERTY MARKET COULD BE at risk if a decline in savings from Asian countries pushes up long-term interest rates, Bank of England Governor Mervyn King said in a newspaper interview, reports Reuters.
"Savings from Asia are coming into financial markets, bidding down interest rates, and that's bidding up asset prices," King told the Western Mail.
Now if that process were to go into reverse, and people in Asia started to save less, then I think you would see a rise in long-term real interest rates and that would have an effect on asset prices as a whole."
King said Britain's housing market was not immune to influences from the world economy.
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