Competition among lenders has continued to hot up, noted the trade body, driving remortgage figures up 8% to £5.6bn in May.

“At the start of August the Bank of England contributed yet further to this, slicing the base rate to just 0.25%. It’s highly likely following comments by Bank Governor Mark Carney that the bank rate has further to fall. AMI expects BBR to be as low as 0.1% by the end of the year.”

AMI said because the rate cut came as part of a multi-pronged package of measures, including the Term Funding Scheme, quantitative easing, corporate bond buying and the reduction of the counter cyclical capital buffer, debate about whether it was needed or not was ‘moot.’

“Taken as a package, these measures go a long way to ensuring that lending continues unabated,” said AMI, which is headed up by CEO Robert Sinclair (pictured).

AMI added that the fact borrowers who product transfer to a lower rate with the same lender are not included in net lending growth market data figures under the terms of the Term Funding Scheme (TFS) must also be reviewed.

For more, see Psigma Investment Management’s chief investment officer Tom Beckett’s piece on the case for a rate rise to boost the spending power of the older people with savings and the cash to spend.