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In a speech to the Treasury Committee today he says in the months ahead it may be that the Monetary Policy Committee judges that the inflation outlook warrants pushing down even harder or that it should ease back somewhat.

King says: "The debate is about the appropriate degree of stimulus, not about applying the brakes.

"Of course, there will come a point when we will certainly need to ease off the accelerator and return Bank Rate to more normal levels. I look forward to that time because it will probably be a signal that there is a smoother drive ahead, with the economic outlook improving in a durable way. But I fear there is some considerable distance to travel before we can begin to use the word "normal."

He says the gradual improvement in credit conditions that was evident earlier in the year seems to have come to a halt in recent months and financial markets more generally have been volatile.

He says there are continuing concerns about the ability of some countries to achieve necessary fiscal consolidation and these are affecting confidence in the ability of banks to repair their balance sheets.

He adds: "More fundamentally, the key underlying causes of the crisis - in terms of the imbalances in global demand - have still not been tackled. Those imbalances are likely to be larger this year than last, and will probably still be around three-quarters of their level at the peak immediately prior to the crisis. Until these underlying problems are resolved, uncertaintyabout the outlook for the world economy will remain."

King says the economy should not read too much into the 1.1% estimated GDP growth in the second quarter.

He says: "We continue to face the challenge of rebalancing our economy away from consumption towards net exports, and raising our national savings rate. During the rebalancing, there is a risk that the level of money spending in the UK will remain weak, with the economy operating below capacity.

"That would push down on inflation - potentially to a rate that is significantly below the 2% target."

But King says it is likely that inflation will remain above target for much of next year. If this high inflation were to become engrained in inflation expectations, it would be difficult to bring inflation back down again.

Source: Mortgage Strategy

It says high energy prices and the increases in VAT will keep CPI inflation above target over the next 18 months, but it will then move well below 2% as these effects wear off and spare capacity bears down on pricing decisions and wage bargaining.

To prevent CPI inflation moving below 1% it says it will be necessary to keep the Bank base rate low at 0.5% for much longer than the markets have anticipated.

The Ernst & Young ITEM Club forecasts that the base rate will remain on hold until the end of 2013, although this is dependent on the assumption that the impending spending cuts actually come through.

Peter Spencer, chief economic advisor to the Ernst & Young ITEM Club, says: "A base rate of 0.5% will begin to look like the new normal."

He says the fiscal tightening implemented by the new coalition should not choke off the recovery, but it will slow UK economic growth over the next two years.

The chancellor's five-year plan to cut the deficit while keeping the pace of the economic recovery is very ambitious.

But ITEM Club believes that in the long term it will lead to more sustainable high-quality growth from 2013 because it will be led by business investment and exports, rather than public spending. 

Spencer says: "On the assumption that the government is able to implement the overall reduction of £40bn it set out in the budget, we expect that UK growth will struggle to reach 1% this year but will gradually speed up in the following years to give the UK a high-quality recovery based on trade and investment."

 Source: Mortgage Strategy

In the latest issue of its News & Views, it says a commitment to maintaining government support for ISMI and mortgage rescue would reassure current and future homeowners and lenders alike.

The chancellor said that from this autumn ISMI would be paid at the level of the Bank of England's average mortgage rate. 

Currently 3.67%, this is significantly lower than the existing ISMI rate of 6.08%, a level that has been maintained since December 2008 as a means of providing additional support for borrowers in most difficulty.

The change is likely to come into effect in October after the Department for Work and Pensions has agreed changes with the social security committee and new regulations have been drawn up. 

The DWP also needs to agree a process for how ISMI tracks the Bank of England mortgage rate, and a mechanism for triggering changes in payments. It is possible, for example, that the rate at which ISMI is paid may only change when the average mortgage rate rises or falls by 0.5%, thus avoiding the administrative problems associated with changing the rate too frequently.

The CML says: "Last year, the DWP reported that 204,000 households were getting mortgage loan payments through income support, jobseeker's allowance or pension credit. 

'We estimate that more than three-quarters of borrowers receiving ISMI payments at the existing rate currently have no arrears on their mortgage - a clear indication that it is currently delivering the support intended for borrowers."

It says paying ISMI at a significantly lower rate, as the government now proposes, will put the finances of these households under considerably more pressure. There is therefore a greater risk that arrears will rise again after October, and the performance of loans where the borrower is behind with payments may begin to deteriorate again. 

It adds: "This could be accentuated over time by base rate increases and a rise in unemployment as a consequence of addressing the fiscal deficit. 

"But we can still avoid a rise in mortgage possessions if borrowers continue to take a responsible approach to payment problems, seek advice on their options at an early stage and communicate with their creditors often involving several secured and unsecured debts outstanding."

The trade body says any further reduction in access to ISMI will inevitably ensure that arrears build up more rapidly, and lead to an increase in the number of possessions.

The CML wants an early decision on the future of mortgage rescue schemes, both centrally and across devolved countries, as it believes they should be retained.

It also says it would be helpful to look at other ways in which this can be achieved. It says an example would be to review the homelessness rules for re-housing former home-owners to ensure they are working as intended. The CML says voluntary sales should not be viewed as borrowers intentionally making themselves homeless.

Source: Mortgage Strategy

The average cost of a property rose by just 0.1% during the month to stand at £170,111, according to Nationwide Building Society.

June's low level of price growth, which followed a rise of just 0.5% in May, will further stoke worries that the housing market recovery is flagging.

Since the beginning of the year, property values have risen by 3%, according to the group.

Nationwide's chief economist Martin Gahbauer said: "Recent indicators point to an increase in the supply of property coming on to the market for sale, perhaps in response to the abolition of HIPs in the opening days of the new coalition government.

"With the level of demand remaining broadly stable, this would in part help to explain the recent slowdown observed in the rate of house price inflation."

Nationwide said that the annual rate at which house prices are rising also fell during June for the second consecutive month.

Prices were 8.7% higher during the month than they had been a year earlier, signifying a drop from the year-on-year rise of 9.8% in May.

Unless there was a significant pick-up in house price growth during the next few months, the annual rate of house price inflation was likely to continue to drift lower, Nationwide warned.

Surveys have shown that increases in the number of homes being put up for sale are not being matched by rising demand from potential buyers.

Source: Sky News

Douglas McWIlliams, Chief Executive of CEBR, says: "The chancellor noted Mervyn King's remark at the Mansion House dinner last week that if growth was slower interest rates would be lower.

"We agree and - with our lower growth forecast we now think that base rates will be stable at 0.5% until the end of 2012 and the 10 year bond yield will fall to 3%. With base rates lower for longer, we also expect mortgage rates to fall from around 4% at present to 3% by early next year."

He says unlike Gordon Brown, it appears that the main bad news was in the speech rather than being hidden in the small print, though a range of reviews announced in the budget may contain more tough decisions.

He adds: "We are much more bearish about the economy than the Office for Budget Responsibility and expect growth in the next three years to average 1% rather than their 2%.

"So we see the tough decisions in the Budget as putting the recovery more at risk. But even we do not see a double dip recession - though we see little growth in consumer spending in the next two years and think that it will be 2013 before we start to see a sustained export and investment boom."

Source: Mortgage Strategy

Pickles today laid an Order suspending HIPs with immediate effect, pending primary legislation for a permanent abolition.

The Secretary of State says he has taken this swift action in order to avoid uncertainty and prevent a slump in an already fragile housing market.

He believes HIPs are currently holding back the housing market because sellers are having to fork-out extra cash, sometimes hundreds of pounds, just to be able to put their home up for sale.

The government believes suspending HIPs will reduce the cost of selling a home, remove a layer of regulation from the process and provide a welcome help to the housing market during the recovery.

Sellers will still be required to commission, but won't need to have received, an EPC before marketing their property, and the government will consider how the EPC can play its part in the new drive for a low carbon and eco-friendly economy.

Pickles says: "The expensive and unnecessary Home Information Pack has increased the cost and hassle of selling homes and is stifling a fragile housing market.

"That's why I am taking emergency action to suspend the HIP, bringing down the cost of selling a home and removing unnecessary regulation from the home buying process.

"This swift and decisive action will send a strong message to the fragile housing market and prevent uncertainty for both home sellers and buyers.

"HIPs are history. This action will encourage sellers back into the market, and help the market as a whole and the economy recover."

Housing minister, Shapps, says: "This is a great example of how this new government is getting straight down to work by cutting away pointless red-tape that is strangling the market. Rather than shelling out hundreds of pounds for nothing in return we're stripping away bureaucracy and letting home owners sell their properties.

"But we're also showing our commitment to a greener housing market by keeping Energy Performance Certificates and making them more relevant in helping buyers make informed decisions on the energy costs of their new home."

Source: Mortgage Strategy

Analysts had widely expected the Bank's Monetary Policy Committee (MPC) to keep the rate on hold against the backdrop of a rapidly changing political situation.

The MPC, which delayed its meeting from last week to avoid clashing with the General Election, has now kept the interest rate at 0.5% for 15 consecutive months.

It is not predicted to change it until plans for the UK's public finances have been set out by a new Government and the economy shows signs of stronger growth.

The committee also announced it would not alter its quantitative easing programme, under which it has pumped £200bn of new money into the economy.

At the top of the MPC's agenda this month will have been how to balance above-target inflation with a still-weak UK economy.

Soaring oil prices have pushed up the cost of living and last month the benchmark Consumer Prices Index (CPI) showed a larger-than-expected rise from 3.4% from 3% in February.

The Bank had expected the inflation rate to fall back sharply later this year and in 2011 as VAT and energy effects fade and the vast amount of slack in the economy kicks in.

But in minutes of the last meeting, rate-setters said they would "continue to monitor developments in inflation expectations closely".

Fears of a longer-lasting spike in inflation could be further exacerbated by a recent rise in factory gate prices.

Producer output prices rose at their fastest pace in 18 months in April, which economists suggested was down to higher oil costs and firms taking advantage of a recent recovery in activity to boost profit margins.

Source: Sky News

The bank, 43% owned by the taxpayer, has released a trading statement this morning announcing its return to profit thanks to a slow-down in the level of its bad debts.

Lloyds group says it has seen lower impairments across its retail secured and unsecured lending portfolios.

The level of impairments for its wholesale division have also dropped sharply compared to both the previous quarter and the bank's own expectations for the first three months of this year.

Although lending has remained flat during Q1, customer deposits have grown over the same period by over £5bn.

The bank says that assets within its run-off portfolios are continuing to reduce, though it admits this is at a slower pace than last year.

It is encouraged by what it sees as improving conditions in the wholesale funding markets, and is due to launch and price a securitisation deal backed by mortgages from Lloyds TSB and Cheltenham & Gloucester at the end of this week.

Eric Daniels, group chief executive at Lloyds Banking Group, says: "The group is continuing to see positive trends in line with our recent trading update on March 19 2010.

"In particular, impairments have slowed significantly in the first few months of the year giving us confidence that we will achieve a better financial performance than previously guided.

"I am pleased to report that we returned to profitability in the first quarter and expect this momentum to be sustained throughout 2010."

Based on the first 10 weeks of the year, Lloyds group put out an earlier trading statement in March saying it was confident that the bank would return to profit this year.

Source: Mortgage Strategy

The latest house price index from Acadametrics, based on actual transaction prices and using Land Registry data, shows the average house price in March stands at £227,788.

Acadametrics estimates that the average price of property transactions in March was 1.1% higher than in February and is up 13.4% compared to the same time last year.

There were approximately 10,000 more homes sold in February than in January, but February's monthly total of 45,000 transactions is below the 51,570 monthly average for 2009.

The average house price in London has climbed to £376,605, a record high.

Source: Mortgage Strategy

Stamp duty on sales up to £250,000 will be suspended for those buying their first property this year and next, Chancellor Alistair Darling said.

However, industry bodies argue this should have applied to all homebuyers as it could be difficult to police.

The change will be funded by a planned increase in stamp duty to 5% for properties costing more than £1m.

Currently, stamp duty for buyers of properties worth more than £500,000 is 4% of the purchase price. It is 1% for properties between £125,000 and £250,000. For properties between these brackets the stamp duty is 3%.

The Council of Mortgage Lenders (CML) argued that it would have been "clearly far simpler" to exempt all properties under £250,000, rather than restrict it to first-time buyers only.

Both the CML and the Chartered Institute of Taxation warned that defining and proving who is a first-time buyer could be difficult.

"The idea sounds good on the surface, but runs the risk of there being complex definitions of first-time buyer that cause anomalies and difficulties in practice," said John Whiting, the Institute's tax policy director.

The CML warned that it would be difficult to verify genuine first-time buyers, as opposed to people who had previously owned property but no longer did so.

Who qualifies?

The new rules state that in order to qualify for the stamp duty holiday:

• The purchaser - or all purchasers if buying jointly - must be buying their first home
• They cannot have previously owned another property anywhere in the world
• They must be buying somewhere that will be their only or their main home
• The completion date is on or after 25 March 2010 and 25 March 2012.

Source: BBC News

At present the highest SDLT rate of 4% applies to purchases where the consideration exceeds £500,000. Legislation in Finance Bill 2010 will add a new rate of 5% for transactions in residential property where the consideration for the transaction exceeds £1 million.

The new higher rate will apply to residential purchases where the effective date (normally the date of completion) is on or after 6 April 2011.

Source: HM Revenue & Customs

Anyone living in the 57 acre site of Queen Elizabeth Park will have their property showcased at Complete Mortgages' office (Beaufort, Parklands, Railton Road, Guildford GU2 9JX), and benefit from a reduction on Seymours standard commission rate.

Simon Kelso (right, below), director of Seymours Estate Agents, says " Now that we are selling a lot of property on QEP it makes sense for our clients to market their homes from the development as well as the 3 local Seymours offices and the feedback from clients has been positive"

Mark Finnegan (left, below), director of Complete Mortgages Ltd, says "We have worked closely with Seymours Worplesdon Road for the past two years and helped a large number of their clients, so this is an excellent way to develop our connection with them".

Source: getsurrey.co.uk

The MPC has also decided not to extend its quantitative easing programme beyond the £200bn it has already spent on buying up assets to boost the economy.

Minutes published by the Committee last month show that the Bank may look to spend more on quantitative easing in the future, but wants to judge how effective its purchases have been before it commits more money to the programme.

Figures from the Office for National Statistics last week revealed that the UK economy had grown between October and December by more than was originally thought.

UK gross domestic product grew by 0.3% in Q4 according to the latest revision, up from the sluggish 0.1% growth initially estimated by the ONS.

The quantitative easing programme was not expected to be boosted further this month as the Bank looks to curb rising inflation.

Inflation hit 3.5% in January, the highest level since November 2008 and up from 2.9% in December.

Source: Mortgage Strategy

The Consumer Prices Index (CPI) hit 2.9% last month - much higher than expected by the City - compared with just 1.9% in November.

The increase is the biggest ever rise in the annual rate of CPI inflation in a single month, according to the Office for National Statistics (ONS).

The surge was partly because of the reduction in VAT to 15% in December 2008.

Adding to the inflationary pressure was far less discounting from retailers in the run-up to Christmas and unchanged fuel prices, compared with sharp falls a year earlier.

The extraordinary factors take the CPI above the Bank of England's 2% target for the first time since last May and make an open letter from Bank of England Governor Mervyn King to the Chancellor virtually certain when inflation figures for January are released next month.

This is because of the return of VAT to 17.5% this month, which will add to inflation when contrasted with 12 months earlier when the tax was unchanged.

The Bank had forecast a sharp spike in CPI at the beginning of the year, but this bigger-than-expected rise may also prompt it to begin moving interest rates up from their current record low of 0.5% earlier than expected by the market.

The Prime Minister played down the increase, saying it had been expected.

Mr Brown said: "I don't think we should read too much into one month's figures on inflation. Generally, Britain has had for 12 or 13 years a low inflation environment that has made possible low interest rates."

The ONS figures showed average petrol prices edging 0.2p higher last December compared with a 6p fall a year earlier, which was the second biggest monthly fall on record.

Clothing and footwear prices fell by far less than a year ago, when the temporary VAT cut came into price and many retailers were forced into early sales to tempt shoppers through the door during the worst point of the recession.

The Retail Prices Index, which includes mortgage interest payments, also jumped from 0.3% to 2.4% on the month - the biggest monthly rise in the annual rate since 1979.

Source: Sky News

The Monetary Policy Committee also opted against altering its quantitative easing programme, under which it has already created £200bn to pump into the economy.

The nine-member committee's decision not to tinker with monetary policy was widely predicted.

The move leaves the interest rate unchanged for the 10th month in a row and suggests the Bank is treating recent signs of a tentative recovery with caution.

It comes despite figures this week showing a two-year high for manufacturing activity, recovering mortgage lending and a raft of positive Christmas trading updates from across the high street.

Although the UK is expected to have finally emerged from recession in the final quarter of 2009, many predict the MPC will leave interest rates on hold well into this year to avoid threatening recovery.

Source: Sky News

There is a significant amount of snow in the Guildford area however due to the fact that the office is within walking distance of Mark Finnegan's home (company director) this means that we will remain open throughout the adverse conditions.

The highest bidder in the auction was Paula Sparrow, who is photographed below with Nick Kennedy (London Irish and England) and Mark Finnegan (director of Complete Mortgages).  Nick was delighted to receive the cheque, which capped off a great day as London Irish beat the league leaders Saracens 23-19 in front of a 19,734 crowd.

We recruited Clare Barton, who works 16 hours per week in administration, during Quarter 3 and we are pleased to see that Clare has quickly adopted the high level of service for which Complete Mortgages is renowned.

For the full details on our survey please visit the Customer Survey Results section of our website, where you can also send us feedback about any aspect of your experience with Complete Mortgages.

We continue to receive a large number of recommendations so if you do know somebody who needs mortgage, insurance or any other financial advice please pass on our details as we will be happy to help them!