Big rate cuts on the way, says economist - buy to let mortgages

11 August 2008

Although the Bank of England's monetary policy committee (MPC) kept the base rate on hold again last week, it will make a series of major cuts in the next year, an economist has predicted.

The economic advisor to business advisory company Deloitte Roger Bootle told the Business Desk that the economy is seeing low growth and may be on the cusp of a recession.

Such a situation will require a radical response from the MPC, he stated, saying: "Interest rates will, eventually, have to fall very far to lift the UK economy out of its current malaise."

Mr Bootle said these cuts would be at least to 3.5 per cent and possibly lower.

Such moves could help lower the cost of buy to let mortgages.

Last week Scottish Widows also predicted major rate cuts next year, forecasting a reduction in the base rate to four per cent by next summer.