Hint that rates may be cut

Posted: 18 Jan 2008 10:53:22 GMT

One member of the Bank of England's Monetary Policy Committee (MPC) has hinted that he would like to see the base rate of interest cut soon.

One member of the Bank of England's Monetary Policy Committee (MPC) has hinted that he would like to see the base rate of interest cut soon.

Sir John Gieve, deputy governor of the Bank, hinted in a speech to the London Chamber of Commerce and Industry that a February reduction would be his preferred choice.

However, he also spoke of the complex decisions that the MPC faces and revealed that he views the current climate as providing "testing times" for him and the other members of the MPC.

In the speech, Sir John said: "Growth is slowing quite sharply now, in part because of the rises in interest rates last year.

"That in itself might justify a progressive shift in policy - from restrictive to a more neutral stance.

"And the case for easing has been greatly strengthened by the disruption in global credit markets and in our own banking system which brings a risk of a deeper downturn," he continued.

Capital Economics recently revealed that it believes the base rate will eventually be cut down to just four per cent.

© Houseladder Ltd


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