Expert predicts interest rates will drop to 4%

www.moneynews.co.uk > General finance > Expert predicts interest rates will drop to 4%

Expert predicts interest rates will drop to 4%

Fri 30th May 2008

The chief UK and European economist for Global Insight has predicted that interest rates will drop to as low as four per cent in 2009.

However, Howard Archer also forecast the base rate will remain at five per cent when the Bank of England's monetary policy committee (MPC) meets next week.

He suggested that while the Bank may have to "tread extremely carefully" on the interest rate issue at the moment in order to keep inflation in check, extended muted economic activity could eventually "markedly dilute underlying inflationary pressures".

Mr Archer said that it was "very unlikely" that the MPC would cut rates until August, at which point they would need a clear indication that wage moderation is continuing and that inflation expectations are being capped.

The Bank of England held interest rates in May but reduced them the previous month, in line with trends for bi-monthly cuts.

Related News : General finance
	Citizens Advice welfare applauds government
	Confused.com energy defends British Gas
	Bank of Ireland passes stress test
	Tesco Mobile deal 'courts consumers'
	Scottish Widows Investment Partnership notes favourable response
	Customers should fix now, says moneysupermarket.com energy
	Confused.com highlights importance of getting the best deal
	Prices on the rise, says moneysupermarket.com energy
	Bank of Scotland economic report 'suggests transitional phase'
	Clydesdale and Yorkshire Banks security advice issued