LONDON, Feb 17 (Reuters) - Britain’s housing market is not overheating, and if it does the Bank of England would only raise interest rates as a last resort, Bank of England policymaker David Miles told Bloomberg TV on Monday.
Concerns about the rapid rise of the housing market prompted the Bank of England to announce it would scrap the part of its Funding for Lending Scheme that supports mortgage lending in November. But the market is still supported by low interest rates and another government scheme.
“We do have, as the last line of defence, the blunt instrument, the big stick of interest rates,” Miles said.
“If you did get into a situation where the tools that the Financial Policy Committee have seem not up to the job of stopping overheating in the housing market, we would then turn to the blunter instrument of using Bank Rate. We’re a long way from that.”
However, Miles added that British interest rates would not remain at their current very low level for years to come.