Mortgages -
Interest rate poll predicts rate cut - 01/02/2008
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Economists agree that the Bank of England will cut interest rates by 0.25 per cent next week, an Adfero poll has shown.
Experts contacted were unanimous that the bank would take action in a financial climate where fears of an economic slowdown remain.
The apparently-cooling housing market would be given a welcome shot in the arm if rates were cut, as the move would make mortgages, including adverse mortgages, cheaper.
Howard Archer, UK Chief Economist at Global Insight, said: "Despite calls for a 50 basis point reduction...we expect the Bank of England to trim interest rates by 25 basis points to 5.25 per cent."
Kenneth Broux, economist for Lloyds TSB, commented: "At 5.5 [economic conditions] have been a little bit restrictive…there’s room for lower interest rates - we're predicting a 0.25 cut."
Economists from institutions including Barclays, RBS and the Centre for Economic and Business Research agreed.
The Bank of England's Monetary Policy Committee announces its decision next Thursday.
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