CML lauds Bank's explanation of mortgage funding issues

Date:Tuesday 21st September 2010
Author: Max Freedman

An explanation by the Bank of England regarding the mortgage funding issues that are facing financial institutions has been lauded by the Council of Mortgage Lenders (CML).

Chief economist at the organisation Bob Pannell highlighted how there are two main areas which the Bank has discussed and which shed some light on how pricing is currently being affected.

Firstly, he noted how secured and unsecured lending propositions are going "upwards" and "downwards" respectively, which Mr Pannell feels is an observation that "leaps out" at readers.

His second point is that it is logical for lenders to try to build up capital by aiming for higher profit margins from new customers, since this could bring down costs in future and help encourage investors.

This week, the Bank released its August lending data for broad money and credit, with the former dropping by 0.2 per cent to £4.1 billion and the latter falling 0.7 per cent to £18 billion.