Bank 'may cut rates over coming months' - commercial mortgages

03 November 2008

The Bank of England could cut interest rates several times over the coming months, an economist has predicted.

Ross Walker from the Royal Bank of Scotland stated that he thinks it is "likely" that the Bank's monetary policy committee (MPC) will opt for a sequence of 50-point cuts over the next three or four months.

Mr Walker claimed that the MPC needs to "get rates down quite quickly", which could be good news for those with commercial mortgages.

And he argued that this would be a "tactical" decision rather than an economic one, as it is difficult for the MPC to predict what will happen in the global financial markets in the current unstable climate.

On October 8th, the MPC met and announced a cut in the base rate a day earlier than was expected.

It was lowered by 50 points to 4.5 per cent in a co-ordinated move with the European Central Bank, the US Federal Reserve and the national banks of Switzerland, Japan, Canada and Sweden.