LONDON (dpa-AFX) - Members of the Bank of England's Financial Policy Committee, or FPC, are alert to housing market risks, minutes of the Committee's November meeting revealed Tuesday.
The members 'had become more concerned about the potential risks to financial stability that might arise from developments in the UK housing market,' the minutes said.
The Committee discussed the potential channels through which house prices and household indebtedness might pose a threat to financial stability. The members were are wary of the likely ability of households to accommodate the increase in debt servicing costs that would result from a rise in interest rates.
They noted that some cohorts of households had particularly elevated debt-to-income ratios. As a result, there was a risk of sharp adjustments to household spending in response to a rise in interest rates, the members felt.
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