3
Apr
Bank 'will cut rates' next week
The base rate of interest will be cut by 25 points when the Bank of
England meets to make a decision next week, Global Insight has
suggested.
Chief European and UK economist at the organisation Howard Archer
claimed, however, that the decision from the Bank will be a "close"
one, something that could have an impact on those with
mortgages.
Such estimation was made, he said, because inflation is so high and
the economy might suffer from this.
And he said that rates are likely to fall again over the course of
the year, possibly to stand at four per cent by 2009.
"We believe that the increasing downside risks to UK growth
stemming from tight credit conditions will prompt the Bank of
England to trim interest rates by a further 25 basis points to 5.00
per cent at its April meeting," he commented.
The Bank's monetary policy committee will meet on 7th and 8th of
April to discuss whether rates should be dropped.