Brits anticipate rate falls

Posted: 13 Mar 2008 11:39:06 GMT

New research shows that Britons increasingly expect the base rate of interest to fall.

New research shows that Britons increasingly expect the base rate of interest to fall.

Fairinvestment has published a study, revealing that more than half of Britons expect interest rates to fall below five per cent before the end of the year.

The base rate currently stands at 5.25 per cent, following a reduction in December and another in February.

According to the research, 29 per cent of people polled said that they thought the base rate would fall to 4.75 per cent.

However, a further 27 per cent expressed their belief that rates would fall further to just 4.5 per cent.

Only nine per cent believe that the base rate will remain at its current level and James Caldwell from Fairinvestment said that there is a wide-ranging belief that rates need to be cut.

"Many people see further rate cuts as a necessary means of easing pressure on household budgets," commented the firm's director.

"The Fed has slashed rates dramatically in the US, and some people believe this should be replicated in the UK, particularly for those struggling with high mortgage payments," continued Mr Caldwell.

Abbey recently published research which revealed that 35 per cent of borrowers would rather be on a fixed-rate mortgage despite a strong belief that rates will fall.

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