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Extent of future rate cuts 'uncertain'

Extent of future rate cuts 'uncertain'

Category: Loans

Updated: 04/12/2008
First Published: 03/12/2008

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Cuts to the Bank of England's official base rate of interest are likely to continue over the coming months, it has been suggested.

Ross Walker, economist at the Royal Bank of Scotland (RBS), stated that the monetary policy committee (MPC) could be affected by the decisions made by the US Federal Reserve.

He explained that the RBS expects the rate to fall from its present level of three per cent to around 1.5 per cent by February.

Such a move could see secured loans become cheaper for borrowers.

And Mr Walker noted that the Federal Reserve is expected to reduce its own rates by 0.5 per cent soon, which could lead to even greater cuts in the UK.

"It's clear we are going to see big reductions, but there is uncertainty over where we will get to and how," he said.

The MPC is due to announce a decision on the rate tomorrow.

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