Bank expected to cut rates

Posted: 06 Oct 2008 13:46:00 GMT

The Bank of England is expected to cut interest rates in October.

Ahead of the Monetary Policy Committee's (MPC) monthly decision on interest rates, which will be announced on October 9th, a poll of financial experts has suggested that a rate reduction could be imminent.

Of 12 high ranking economists, financial institutions and business analysts questioned, seven forecast cuts while five predicted that the current rate of five per cent - which has stood since April - will be maintained.

Several banks including HSBC and the Royal Bank of Scotland (RBS) have predicted a cut of 25 basis points - a move which could ease pressure on new and existing mortgage payers.

However, not all are so confident. Ben Read, senior economist at the Centre for Economics and Business Research said that "any sensible, rational economist would be looking to cut rates in October", but added that the decision is difficult to call.

"A lot of the MPC still seem very focused on inflation when most of the rest of the world has moved on," he said. "I think they will probably still hold in October and cut in November."


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