MPC unanimous in interest rate decision
The minutes show the easing in the number of mortgage loan approvals and initial signs that fewer properties were coming onto the housing market for sale were noteworthy for the Committee.
It found that these developments were taking place in the context of continuing buoyancy in house prices, which was particularly marked in London.
Yet the Committee said it remains to be seen how much of the fall in approvals was connected with temporary effects associated with the introduction of the Mortgage Market Review and with potential sellers speculating that they might benefit from higher prices if they delayed putting their properties on the market.
Moreover, it was unclear what medium-term effects, if any, the MMR might have on the supply of mortgage lending.
The Committee noted that the Financial Policy Committee would have an opportunity to consider the issues related to the housing market at its June policy meeting.
The Committee also said that it would continue to refine its views on interest rates as the economy evolved and was becoming more balanced.
In terms of the immediate policy decision, however, all members agreed that, in the absence of other inflationary pressures, it would be necessary to see more evidence of slack reducing before an increase in Bank Rate would be warranted.