Bank of England Governor Mark Carney said his warning that record-low interest rates will rise sooner than markets expect was "a personal view."
ITV News Economics Editor Richard Edgar reports:
Committee chairman pressing Carney that his Mansion Hse speech which took markets by surprise was a personal view.
It was the intended consequence of your speech to change expectations about the first move on interest rates, Carney is asked: "Absolutely"
Bank of England Governor Mark Carney told MPs there has not been an acceleration in "actual earnings" growth.
He told the Treasury Select Committee, "Since 2008 there's only been six individual months in total where average weekly earnings has been above inflation".
ITV News Economics Editor Richard Edgar writes:
After all the excitement about an imminent rise in rates, Carney tells committee of MPs that the data on wages is still weak[so no need yet?
Calm down everyone: Carney says what matters to borrowers is not the timing of first rate rise but their path: "gradual but limited" rises.
House sellers' asking prices went up 8.9% in the last 12 months, meaning the average property is on sale at a new record high of £272,003.
- In London, asking prices went up 16.3% in the last year
- Compared with 4.9% across the rest of the country
- Ten out of 32 boroughs in London say annual rises of more than 20% - with a 43% increase in Tower Hamlets driven by cash buyers.
Deputy Prime Minister Nick Clegg told ITV News the government may have to scale back its flagship 'Help to Buy' housing policy.
Nick Clegg said a warning from the Governor of the Bank of England - that booming house prices are a threat to economic recovery - must be heeded.
In comments that appear to contradict Chancellor George Osborne's defence of the programme, Mr Clegg said: "If Mark Carney - in view of his concerns about the housing market - thinks we should scale back on some of those schemes, that's exactly what we should do."
Deputy Political Editor Chris Ship reports.
The Bank of England has the powers to prevent a new housing "bubble" developing, the Prime Minister said, after its governor Mark Carney suggested it was the biggest risk to economic recovery.
Speaking to Sky's Murnaghan programme, David Cameron said: "We have given the Bank of England the duty to make sure that bubbles are dealt with in the economy. They have all the powers they need to do that.
"He (Mr Carney) is absolutely right when he says fundamentally we need to build more houses in Britain".
The Government's "unwise" Help to Buy scheme has been criticised amid the Bank of England governor's warnings of a property "boom".
Sam Bowman, research director of the Adam Smith Institute, said: "Mark Carney's comments on house prices are timely and accurate: the house price boom in London, the south-east and the East Midlands is fundamentally down to a lack of housing."
He added that the "supply-side crisis" meant it was up to the Government - not the Bank - to bring prices under control, and called for a rolling back of the green belt to create space for one million homes.
Mr Bowman said that while Help to Buy was "probably too small to make a substantial difference to house prices" it was "inflating demand without increasing supply".
Ed Balls has warned that interest rates may have to rise if the government does not act to ease the current property "boom".
The Shadow Chancellor said: “Mark Carney is right to warn about the risks to our economy of a lop-sided housing market where housing demand hugely outstrips supply.
Mr Balls said the Governor's comments put the ball in George Osborne's court, adding that the Government should cut the Help to Buy limit to £600,000 and introduce an additional "Help to Build scheme".
“Unless the government acts the danger is that the Bank of England will be forced to raise interest rates prematurely.
The government's controversial Help to Buy scheme is "providing desperately needed homes", the association representing property builders has said.
Home Builders Federation Executive Chairman Stewart Baseley said: "The Help to Buy Equity Loan scheme has supported demand for new build homes and its extension provides certainty about longer-term demand.
Mr Baseley said the scheme is helping the industry "plan ahead, rebuild capacity lost in the downturn and deliver".