March rate cut not on the cards

Posted: 29 Feb 2008 10:40:30 GMT

A new poll suggests that the Bank of England's Monetary Policy Committee (MPC) will not cut the base rate of interest next week.

A new poll suggests that the Bank of England's Monetary Policy Committee (MPC) will not cut the base rate of interest next week.

Eight major financial institutions were questioned about March's interest rate decision, with all of them forecasting no change.

It follows rate cuts in December and February, bringing the rate down from 5.75 per cent to its current level of 5.25 per cent.

Mortgage borrowers will be hoping for a rate cut in March but the majority of analysts are not convinced.

"Markedly faltering UK growth and the very real risk of a sharp economic downturn mean that further interest rate cuts are clearly on the Bank of England's agenda," said Global Insight economist Howard Archer.

"Nevertheless, next week's meeting of the Monetary Policy Committee is highly likely to prove too soon to yield the next 25 basis point interest rate cut to five per cent given current elevated inflationary pressures," he continued.

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