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Experts predict interest rate cut

Experts predict interest rate cut

Category: Loans

Updated: 08/01/2009
First Published: 07/01/2009

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 It is now over 6 months old so the content may be out of date.

The Bank of England has been predicted to make a further reduction to the base rate of interest when the decision of its monthly meeting is announced tomorrow.

All 13 economists, financial institutions and business organisations surveyed by Adfero said that a cut is the most likely outcome, a measure that could lead to cheaper mortgages and secured loans.

The Bank's monetary policy committee is meeting today and will reveal its decision tomorrow, having reduced the rate from three per cent to two per cent last month.

Those questioned were divided over the extent of the likely reduction, with predictions ranging from 0.5 per cent to another full percentage point.

According to chief economist at Lloyds TSB Trevor Williams, the more modest move is "what is expected".

However, he himself predicted a larger cut, stating: "I think if they want to remain ahead of where markets are looking for and maybe get to where they want to be quicker ... they'll do [a] one percentage point cut."

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