Bank of England will use 'a number of measures' to increase lending - buy to let mortgages

30 January 2009

The Bank of England is likely to employ a number of measures to stimulate increased lending, it has been suggested.

Jonathan Loynes, chief European economist at Capital Economics, stated that interest rates are likely to reach zero, or very close to zero, in the coming months meaning the Bank will turn to other methods to improve the economic situation.

"They are going to want to try virtually anything as far as a policy stimulus is concerned," he remarked.

Mr Loynes suggested that the Bank of England will begin to buy corporate bonds as well as bonds from the government to lower interest rates in the long term.

An increase in lending and lower interest rates could benefit holders of buy to let mortgages.

The Bank of England will reveal the outcome of its two-day February interest rate meeting next Thursday, with the possibility that the interest rate might be further lowered from its current level of 1.5 per cent.