The Association of Mortgage Intermediaries (AMI) responds to the decision of the Bank of England's Monetary Policy Committee to reduce the Interest Rate to 3.0%.
Robert Sinclair, AMI Director, said:"A cut in interest rates by 150 basis points (1.5%) is a very welcome move. We believe this demonstrates support for the underlying economy and is a phenomenal step. However, while the disconnect between inter-bank and base rate remains we require further intervention and mortgage market support by the authorities to deliver savings to consumers. AMI hopes that lenders pass on the benefits of the rate cut to consumers where possible.
"AMI's latest Quarterly Economic Bulletin showed that lenders continue to increase margins and tighten the terms on which they lend. While there has been significant activity to maintain our banking system, the actions have yet to work their way into the mortgage market. It will be interesting to see whether institutions immediately pass this benefit on to consumers who have been struggling under rising mortgage costs during the year. We want to see real benefits for consumers, particularly in light of the turbulence in the sector.
"We continue to meet with the Treasury, Bank of England, Financial Services Authority and Sir James Crosby to set out our case for decisive action. We have also spoken to all of the political parties, as we believe that political impetus needs to be brought to bear if we are to stop this economic crisis doing permanent damage to the home-owning public, the mortgage industry and the wider economy."
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