Tuesday, May 20, 2014

Cable Rose as London Housing Boom

Sterling was little changed versus the U.S. dollar as prices for London homes jumped to a record this month. Carney said policy makers “could do more” to tackle the risks of rising house prices. Options include imposing more checks on the affordability of mortgages, limiting types of loans or advising the government to rein in its stimulus program.

Values of homes in London climbed 3.3% from April to an average 592,763 pounds, the property website operator said yesterday. Consumer prices rose 1.7% from a year ago last month, according to the estimate. The inflation rate was 1.6% in March, the lowest since October 2009.

It has been below the BOE’s 2% goal since December, helping to support Carney’s case for keeping the benchmark interest rate at a record-low 0.5 percent, where it’s been since March 2009. Sterling was at $1.6824 yesterday after climbing to $1.6996 on May 6, the highest since August 2009. Today the English currency started the session with a little change at 1.6814 to record a low of 1.6810.

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