LONDON May 1 The Bank of England will have to
decide in coming months whether to cool surging house prices as
it would be "dangerous" to ignore the momentum that has built
up, Deputy Governor Jon Cunliffe said on Thursday.
"It would be dangerous to ignore the momentum that has built
up in the UK housing market since the spring of last year,"
Cunliffe told a banking industry dinner.
Mortgage lender Nationwide said on Thursday that British
house prices last month recorded their biggest annual rise since
the start of the financial crisis in 2007.
Growth in prices has not been limited to London and is due
to pent-up demand and tight supply of properties, Cunliffe said.
There was good reason to believe such a "mutually
reinforcing combination" could lead to a period of sustained and
very powerful pressure on house prices, he said.
"This is a move that has been seen more than once in the
UK," he added.
Cunliffe sits on the Bank's Financial Policy Committee (FPC)
which has powers to make recommendations to regulators to take
"Whether and how to act further if, following the pause of
the last couple of months, momentum continues to build, will be
the most challenging judgement the FPC will have to take in the
coming months," Cunliffe said.
(Reporting by Huw Jones; Editing by Susan Fenton)