THE GOVERNMENT’S Help to Buy mortgage guarantee scheme could leave the taxpayer with a big bill if it becomes permanent, Sir Mervyn King warned.
Stopping it being extended is one of several challenges his successor Mark Carney will inherit, as a huge array of market stimulus packages will have to be withdrawn when the economy improves.
Sir Mervyn also warned it will be difficult to unwind quantitative easing as markets become reliant on ultra-low interest rates.
And he said Carney will reveal in August whether or not the Bank will give an unemployment target to achieve before it starts tightening policy again.
“There is a debate to have on that – Mark Carney has been speaking to monetary policy committee members on it,” he said.