Lomax speaks of base rate uncertainty

Bank of England deputy governor Rachel Lomax has said the monetary policy committee (MPC) faces difficult decisions over interest rate policy.

In a speech to the Confederation of British Industry, Ms Lomax, a member of the MPC, stated the body could apply "discretion" over the timing of its attempts to get inflation back to its two per cent target.

However, she insisted, historical events did not give a clear indication of how the various factors present in the economy would affect inflation.

This uncertainty means those wanting to get on the housing ladder and hoping for lower mortgage rates cannot be sure this will come about.

An alternative strategy would be to consider the self build option.

The Bank of England cut the base rate last month, but the previous cut (December 2007) was followed by a vote in favour of holding the base rate in January.


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