The head of the Bank of England, Mervyn King, told media yesterday that the Monetary Policy Committee (MPC) is willing to cut interest rates to bolster economic growth. Addressing the Treasury Select Committee, Mr King admitted that the recent tightening of lending conditions has made cuts more likely, as the Committee attempts to regulate the fluctuating economy.

Members of the National Association of Estate Agents (NAEA) have reported that the number of home buyers has decreased over the past month. The NAEA says the percentage of first-time buyers in the market has also plummeted. The NAEA attributes both these declines to the current gloomy economic climate in the UK.

Despite promises to cut interest rates, King says he expects UK inflation rates - already above the central bank’s two percent target - to rise even further as a result of increasing utility bills. Mr King told the media, “We set interest rates to meet our inflation target. There are big risks on either side, if the evidence moves more in favour of one set of risks than another then we will respond”.

Analysts say that he global credit crunch combined with consumer inflation is putting great pressure on the property market. Mr King stated that the Bank of England aimed to provide financial assistance to banks where necessary in order to prevent “market shock”.

If rising interest rates and inflation are causing you to accumulate debt, contact MPG Investments. We will buy your house, giving you the cash you need to free yourself from financial worry.