Britain unveils measures to tackle rising house prices

June 14, 2014 - 3:05:04 am

LONDON: Britain’s finance minister George Osborne has unveiled measures aimed at curbing London’s surging house price inflation, as the Bank of England stands ready to finally raise interest rates.

It comes as Fitch yesterday affirmed its AA+ credit rating for Britain and gave it a “stable” outlook, citing the country’s accelerating economic recovery.

In a keynote speech to business leaders delivered in the capital late on Thursday, Chancellor of the Exchequer Osborne announced plans for up to 200,000 new homes and said he would strengthen the Bank of England’s ability to impose restrictions on how much home buyers could borrow.

Osborne appeared to heed the advice of the International Monetary Fund (IMF), which recently warned that a lack of supply was fuelling Britain’s price boom that is most pronounced in London.

Osborne meanwhile promised an “urban planning revolution”, in which the government could force local councils to build housing developments.

“We saw from the last (financial) crisis the dangerous temptations for politicians to leave the punch bowl where it is and keep the party going on for too long,” said Osborne, a member of Prime Minister David Cameron’s Conservative party that heads Britain’s coalition government with the Liberal Democrats. “I want to make sure that the Bank of England has all the weapons it needs to guard against risks in the housing market,” Osborne said.

UK mandates banks for maiden sovereign sukuk

London:  The British government has mandated banks to arrange a five-year £200m ($336m) sukuk — the world’s first Islamic bond to be issued by a Western sovereign.

The Islamic bond could be issued in the coming weeks, subject to market conditions, The Treasury said in a statement late on Thursday. The roadshow will start on June 17 in Jeddah and Kuala Lumpur, then moving to Riyadh, Dubai, Doha, and Abu Dhabi, ending in London on June 20, lead banks said.

A sovereign sukuk is the centrepiece of Prime Minister David Cameron’s bid to position London as a leading hub for Islamic finance, as competition heats up with financial centres in the Middle East and Asia.