BoE Financial Policy Committee (FPC) Financial Stability Report: Sets limits on size of mortages relative to incomes (as expected), effective Oct 1
- Sets flow limit of 15% on new 4.5% plus LTI mortgages.
- Targets mortgages of 4.5X borrowers income and higher.
- Steps will not curb house inflation on MPC central forecast.
- To set counter cyclical capital buffers every quarter, counter cyclical buffers set at 0% for UK exposure
- FPC does not believe household debt is a threat to stability at the current time.
- Lenders should assess whether mortgages are affordable if bank rate rises.
- BoE Gov Carney: Reiterates policy tools must be used in concert, biggest risk comes from housing market.
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