Base rate cut predicted for this week

The Bank of England is expected to make a further interest rate reduction this week.

A poll of economists conducted by Adfero showed that 11 out of 12 feel a cut will be announced on Thursday following the monthly meeting of the Bank’s monetary policy committee (MPC).

The majority of analysts questioned said they believe the base rate will be lowered by around 50 to 100 basis points.

Mark Swift from business organisation EEF claimed: “Whilst the Bank still has room to cut it should do so.”

And Charles Davis of the centre for economics and business research stated: “Everything seems to be supporting the downturn at the moment. That might well push them into even stronger action than a 50 basis point cut.”

A reduction in the base rate could help borrowers to handle mortgage repayments and clear debt.

It was lowered by the MPC earlier this month and currently stands at 1.5 per cent.

By Jamie Price