Interest rate cuts ‘won’t come until August’

Cuts in the base rate of interest will not be made until August at the earliest, according to the assessment of one economic expert.

Howard Archer, chief UK and European economist for Global Insight, maintains that the Bank of England looks set to adopt an “extremely” careful approach to setting interest rates in months to come.

With millions of consumers struggling to become debt free, many will be hoping for base rate reductions but such a move will not be made in June, Mr Archer has asserted.

However, the economic analyst is convinced that borrowing costs will fall steadily over the coming year and that at some point in 2009 the base rate could be as low as four per cent.

“It currently seems highly unlikely that the bank will be prepared to trim interest rates again until August at the very earliest,” he made clear.

So far in 2008, the Bank of England has cut the base rate of interest by 0.25 per cent on two occasions and left it unchanged in January, March and May.

Written by Giles Stevenson