Ajay Jagota of North East sales and lettings firm KIS last week met with Sir Jon Cunliffe, Deputy Governor for Financial Stability of the Bank of England, as part of a panel of key housing figures.
As part of the meeting, Ajay, who is a member of the Shadow Monetary Policy Committee in the region, urged the Bank to consider raising the cost of borrowing in order to drive economic growth.
UK Interest Rates have now been stationary for 67 consecutive months, having been held at 0.5% since March 2009.
Ajay said: “I was pleased to report the growing strength of the North East property market to Sir Jon – characterised by strengthening house prices and strong rental yields for property investors.
“As part of that meeting I put forward the case for a limited and gradual rise in interest rates too – something I have been advocating for some time.
“We need to wean ourselves off the idea that near-to-zero interest rates are normal. They aren’t. They are a short-term response to the financial crisis which have somehow become a permanent part of our economy for the best part of ten years.
“Holding interest rates unnaturally low indefinitely is the economic equivalent of sustaining wartime rationing into the 1960s. With the economy growing, employment high and inflation non-existent, if we don’t grasp the nettle now, when do we?
“We have falling unemployment and pay packets are finally starting to grow. In the last couple of quarters we’ve started to see productivity come back too. Although this hasn’t been reflected in inflation yet, that is largely down to external factors falling oil prices. In 18 months time we might be grateful for taking the opportunity to head off inflation now.
“We also need to clear the system of ‘zombie’ companies who have held on due to low interest rates. This would give more robust businesses space to prosper, leading to increased productivity and economic growth.
“Regardless of what decision its Monetary Policy Committee take, it’s both impressive and admirable that the Bank of England would go to such lengths to consult with and take counsel from different business sectors in different regions.”
KIS are famous for being the first letting agents in the UK to abolish deposits, replacing them with a one-of-a-kind landlord insurance policy offering guaranteed rent, deposit replacement, legal assistance and round the clock third party emergency home repairs
Named Letting Agent of the Year in 2013, the firm expanded into sales in 2014.