Speaking in 2012 about the lessons to be learned from the Financial Crisis the Governor of the Bank of England Mervyn King said:-
“When, as it will, the economy returns to normal, our role will be to take away the punchbowl just as the next party is getting going”.
Last week the Bank appeared to be gearing up for action with its Financial Policy Committee asking for powers to limit Banks mortgage lending by reference to Loan to Value and Debt to Income Ratios. At the same time the FPC said:-
“It is not the FPC’s role to control house prices, nor can it address underlying structural issues related to the supply of houses” –perhaps a side swipe at politicians consistent failure to deliver an environment that would encourage more house building thus easing supply side constraints?
With the London housing market in “party” mode whilst the Regions struggle for some form of normality the Bank must avoid a “one size fits all” approach when exercising its new powers.