News

Rate cuts must wait, say economists

Rate cuts must wait, say economists

• Get a better rate on your mortgage, click here for a mortgage planner

 

Those looking to apply for a mortgage and hoping a base rate cut will come soon may have to wait until near the end of the year, economists have predicted.

Following the release of the minutes of this month's Bank of England's monetary policy committee (MPC) meeting yesterday, experts have suggested the most likely outcome is a series of rate cuts starting late on in 2008 as inflation falls and the economy slows.

David Loynes of Capital Economics said a cut very soon was unlikely but added: "We still think rates could be falling by year-end and will eventually drop much further than the markets expect."

A similar view was expressed by Lehman Brothers economist Peter Newland.

He argued that a mixture of oil price stabilisation and economic slowdown would bring about "the first of a string of rate cuts in November".

The minutes of the meeting showed seven of the nine MPC members voted to hold the rate, with David Blanchflower voting to cut the rate and Tim Besley wishing to raise it.

Your home may be repossessed if you do not keep up repayments on your mortgage.

The news articles on our website are produced by Adfero Ltd and do not in any way represent the thoughts and opinions of anyone associated with mdnationwide limited. They are purely here for the reader to obtain the latest news and breaking news from the world of finance.