Interest rates could become lowest ever

Posted: 08 Jan 2009 11:28:30 GMT

The monetary policy committee (MPC) is expected to cut the interest rate by half a percentage point today (December 8th), according to research into the views of analysts carried out by Bloomberg News.

Bloomberg News has published the median interest rate predictions of 60 economists, who conclude that the Bank is likely to drop rates by 0.5 per cent in order to stimulate the economy to both fend off recession and bolster the housing market,

Such a cut - putting the rates at 1.5 per cent - would leave interest rates at their lowest since the Bank was formed in 1694.

"The outlook for the economy is pretty bleak and the first half will be horrible," said Stewart Robertson, an economist at Aviva Investors Ltd, in a Bloomberg interview.

"Whether the trough is zero or half a point, it doesn’t really matter now. We're moving towards more coordination between the Bank of England and the government."

Such a cut could benefit homeowners hoping to sell a property, as it could persuade a greater number of buyers to bid for a home.

Selling a property online could also increase the chances of a home being sold for its asking price, as more buyers may see a property.

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