Economists predicting further 1% base rate cut

3 December 2008

Ahead of the official Monetary Policy Committee meetings on Wednesday and Thursday, economists are predicting a further 1% base rate cut this week.

The Evening Standard states that “most” City economists are predicting a 1% cut, while other economists have referred to recent speeches from Bank of England Governor Mervyn King suggesting that further cuts are on the horizon.

Homeowners on tracker mortgages will automatically benefit from any base rate cut, while would-be borrowers will hope to see interest rates on fixed-rate mortgages and personal loans also come down.

A loans expert for Think Money said: “There has been speculation that the base rate could fall as low as 1% next year, so a base rate cut at this point would not be unexpected.

“Loan rates have stayed relatively high despite recent base rate cuts, so would-be borrowers will hope that further base rate cuts will encourage lenders to offer loans at more competitive rates.”

Tags: loans, bank of england, bank, banks, loan, loan rates, base rate cut, base rate

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