Bean: Interest rates may be 'only game in town' to dampen housing market

clock

The Bank of England may find monetary policy such as raising interest rates "the only game in town" to combat financial stability risks such as the housing market, the deputy governor has warned.

Outgoing Monetary Policy Committee member Charlie Bean acknowledged the central bank has created prudential tools to curb risk, such as the Financial Prudential Committee. But he said monetary policy can still play a role in controlling "irrational exuberance" in mortgage lending. In a speech at the London School of Economics, he said: "Compared to the impact of changes in interest rates, we have relatively little experience of deploying macroprudential instruments. And there will often be scope for those affected to work out ways to circumvent them, including by moving activities outsid...

To continue reading this article...

Join Professional Adviser

  • Unlimited access to real-time news, industry insights and market intelligence.
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters.
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection.
  • Members-only access to the editor’s weekly Friday commentary
  • 
 Be the first to hear about our events and awards programmes.

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

Bank of England

Bank of England holds rates at 5.25% after inflation falls

MPC in split decision after inflation unexpectedly fell in August

Valeria Martinez
clock 21 September 2023 • 3 min read
Food inflation remains well above the headline rate but has also fallen, down to 13.6% from las month’s 14.9% figure.

Rate rise remains likely despite surprise inflation fall to 6.7%

Prospect of more hikes cannot be taken 'off the table'

James Baxter-Derrington
clock 20 September 2023 • 1 min read
Even during the Global Financial Crisis, opinions of the Bank of England remained positive

Public satisfaction with Bank of England falls to record low

Only 19% satisfied with the BoE's performance in fighting inflation

Elliot Gulliver-Needham
clock 19 September 2023 • 1 min read