Former Bank of England deputy governor Sir Charlie Bean has warned that Government intervention in the mortgage market could prove risky for the economy.
Bean’s warning comes after Housing Secretary Michael Gove said the Government was keeping options “under review”.
The Liberal Democrats have been calling on the Government to create a £3bn mortgage protection fund to provide Covid style handouts to struggling homeowners.
Speaking to Sophy Ridge on Sky News Bean said: “There’s not a lot [Government] can do to influence the overall macro environment in a favourable way.
“There may be things it wants to do to alleviate pain on particular parts of the population, poor households or whatever.
“There obviously have been some calls for protecting those with mortgages.
“I think that’s risky territory to get into because of course, if you do that and reduce the pressures on those with mortgages, that reduces the extent to which the economy slows and just means the bank has to raise interest rates even more.”
Yesterday The Sunday Times reported that the Treasury had dismissed calls for an intervention out of hand.
But it did speak to sources who said such plans had been drawn up by aides.
