RICS: Bank of England July interest rate decision

Commenting on the Bank of England's interest rate decision, Brigid O'Leary, RICS senior economist said: "The Bank of England's commitment to complete the next £25bn of asset purchases within the next month suggests that the August MPC meeting, coinciding with the release of an Inflation Report, may be a more appropriate time to consider increasing the asset purchasing programme further.

"There has been some disappointment that the asset-purchasing scheme has not yet transpired into a more significant improvement in lending. However, it would be premature to declare that the scheme has been unsuccessful given that corporate bond yields have come down materially since the introduction of the programme.

"As far as the housing market is concerned, mortgage finance is still in short supply and is likely to remain so for some time. That is partly due to a limited deposit base for lending. But also, lenders risk aversion will keep loan to value ratios generally low, not withstanding special rates such as the Nationwide's 125% mortgage announced earlier. It's not clear that an extension of the asset purchase programme will expedite an improvement in the mortgage market."