Hope for December rate cut

Posted: 06 Nov 2007 14:20:06 GMT

Homeowners could see their mortgage payments reduced in December, according to a leading economist.

Homeowners could see their mortgage payments reduced in December, according to a leading economist.

The majority of analysts believe that the Bank of England's Monetary Policy Committee (MPC) will announce a cut to the base rate of interest in 2008.

However, Royal London Asset Management (RLAM) disagrees, stating that the cut may come slightly earlier.

"The latest PMI data suggest that after many months of strong growth, the UK economy is now slowing down," said Ian Kernohan, RLAM economist.

"The MPC wants things to slow in order to contain inflationary pressures, so they will not rush to cut interest rates at this stage however, I do expect next week's Inflation Report to call the top in UK rates. 

"Further weakness in the data and continued turmoil in the financial markets should herald a rate cut in December," he continued.

The MPC is due to meet on Thursday to announce the base rate for November, with most commentators expecting the rate to be maintained.

© Houseladder Ltd