The global economy risks becoming trapped in a "low growth, low inflation, low interest rate equilibrium", according to Bank of England governor Mark Carney. Speaking at the Annual Institute of International Finance G20 Conference in Shanghai, Carney said: "For the past seven years, growth has serially disappointed - sometimes spectacularly, as in the depths of the global financial and euro crises; more often than not grindingly as past debts weigh on activity".
January 2016 saw an annual price increase of 7.1% and a monthly rise of 2.5%, according to the latest Land Registry house price index. London experienced the greatest increase in its average property value over the last 12 months with a movement of 13.9%. The North East saw the lowest annual price growth with an increase of 0.2% and also the most significant monthly price fall with a decrease of 1.6%.
Mark Carney has admitted that the Bank of England would consider cutting interest rates to stimulate Britain's economy. Speaking at a Treasury Select Committee hearing today, Carney maintained that interest rates are "more likely than not to increase", but added that "we are not on a present course and of course if risks were to materialise and the global situation were to intensify to the downside, that would have implications for the path of policy." Discussing possibly measures, Carney said: “We could cut interest rates towards zero. We could engage in additional asset purchases, including a variety of assets. “We could also provide a perspective where we could adjust our policy horizon. We could shorten our policy horizon over which we wanted to return inflation to target.” However, he ruled out negative interest rates, adding: “We have no intention, no interest in negative interest rates. We have other options and would take very seriously the impact of negative interest rates on financial services and building societies especially."
Cutting tax relief could lead to a "pensions exodus" in favour of ISAs if the Chancellor opts for a flat rate at next month's Budget. A third of savers said they would switch their contributions to an ISA, while just one in five people would continue to save into a pension at the same level if the higher rate tax relief was cut. Others said they would choose alternative investments, including property.
Around one in four UK adults who were considering a Buy To Let property investment have been put off by the Government's plan to introduce a 3% additional stamp duty and cut tax relief on their finance costs, according to online survey. The research shows that 9% of UK adults have given up on aspirations to own a BTL property because of the government’s plan while 30% of UK adults are still considering whether to do so. Around one in seven (14%) existing landlords say they will now sell one or more of their properties because of the new rules.