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Rate cut is possible, but not likely, says expert

Rate cut is possible, but not likely, says expert

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A reduction of the base rate of interest for May could be a possibility, but a hold is a more likely outcome, one expert has remarked.

Simon Ward of New Star Asset Management has suggested that the Bank of England's monetary policy committee (MPC) will vote to hold interest rates at five per cent.

Mr Ward stated that May's inflation data and the new liquidity scheme from the Bank will lead the MPC to reach this decision.

"Weighing up these factors, my MPC-ometer suggests a 6-3 vote for unchanged rates this week. A cut is certainly possible but would be dangerous given current inflationary risks," he said.

The MPC will announce its decision tomorrow and a rate cut could affect the cost of repayments for some mortgage holders.

However, the MPC does not usually make changes to the base rate in two consecutive months, with the last cut being in April.

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

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