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Interest rates 'will fall further'

Interest rates 'will fall further'

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Interest rates will fall further still, despite the Bank of England's "surprising" cut of 1.5 per cent that was unveiled last week, it has been claimed.

The reduction will help the economy to recover from its current slump, according to Vicky Redwood from Capital Economics.

She noted that while the Bank was still concerned about inflation a few months ago it could not cut interest rates.

But now the situation has changed and more rate reductions are expected, she added.

"We think rates could fall to at least one per cent, we certainly wouldn't rule out them falling below that," Ms Redwood revealed.

However, the base rate cut's effects may be "partly limited" if not all lenders pass it on to consumers, she stated.

Meanwhile, the latest Office for National Statistics figures show that consumer inflation rose to 5.2 per cent in September.

The biggest upward pressure came from household services due to increases in the cost of gas and electricity bills.

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

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