September rate cut unlikely, says economist

29 August 2008

People struggling with debt problems are likely to have to wait a while before they`re offered relief in the form of an interest rate cut, it has been suggested.

Institute of Directors (IoD) chief economist Graeme Leach predicted that the monetary policy committee (MPC) is unlikely to reduce rates when it meets next week.

In fact, he said the best people can hope for is a quarter per cent reduction by the end of the year.

"But don`t expect anything more than that at the moment," Mr Leach added.

He explained that the IoD expects there will be "a lot more evidence of slowdown" before an interest rate cut is made.

The interest rate has remained static since April 10th this year, when the MPC voted for a quarter point cut.

Those trying to get out of debt have not had an easy ride of late, with the Consumer Prices Index increasing to 4.4 per cent in July from 3.8 per cent the previous month.

The cost of petrol, meat, bread, cereals and vegetables all increased in this period, according to the Office of National Statistics.


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