Interest rate cut is still on

Posted: 14 Nov 2007 17:22:57 GMT

Homeowners can still expect a cut to the base rate of interest early next year, according to a leading economist.

Homeowners can still expect a cut to the base rate of interest early next year, according to a leading economist.

Howard Archer from Global Insight has even suggested that the Bank of England may announce the cut in December.

It comes despite the latest figures from the Office for National Statistics, which revealed that inflation crept back above the government's two per cent target in October.

The rise to 2.1 per cent came as a surprise to the industry and has led to fears that the expected cut to the base rate of interest may not come.

However, Mr Archer is confident that borrowers will receive some relief by February at the latest.

"Despite recent higher inflation, there appears to be a clear possibility that the Bank of England could trim interest rates before February if a flurry of weak data and survey evidence indicate that the economy is slowing sharply," he said.

The Council of Mortgage Lenders has recently called for the base rate of interest to be cut sooner rather than later.

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