J. Mackay: the fact that your postman is investing in BTL at all tells me all I need to know about the property market. When it gets to the stage where postmen (who, we're told, earn about 20,000 p.a.) are leveraging their home equity in complex credit deals to "invest in a buy-to-let portfolio" it's time for all sane investors to exit the market pronto.

As for the MPC, they have been far too relaxed about asset price inflation, especially housing which is one type of asset price inflation they can easily influence. They're by no means the worst offenders, however, and it certainly is trying that the Govt has no will to tackle this troublesome housing bubble e.g. through taxation reform or building programmes.

MB, Edinburgh,

Inflation (or the rising cost of livling) is much higher than 2.8%. What incentive is there to save once tax has been paid?

It's vital that we do not try to inflate our way out of problems. It just stores them up for the future.

Paul Cahill, Sevenoaks, Kent

I think the B of E is right to be cautious about rate increases. After all there is no guarantee that the economy can withstand a rate of more than 1% in real terms ( if measured against RPI. )
The increases to date are already having an effect. Why, only the other day I was talking to our postman about his portfolio of buy to let properties, and he is becoming much more cautious. At the beginning of the year he was forecasting capital growth of 20%, but his expectation is now only for 12% to 15%. Not only that, but he usually increases his borrowings for reinvestment at the end of each year by 80% of the value increase but he intends to restrict this to only 60% this time.
I cannot understand the recent criticism of the Bank on grounds of lack of transparency and clarity. Over the the past couple of years it has always been very clear to me what the MPC has been aiming to do, and the scale and timing of rate movements have come as no surprise to me whatsoever.

J. Mackay, London,