Economists predict base rate cut ? commercial mortgages

27 February 2009

The majority of economists in a new poll have predicted that another base rate cut will unveiled next week by the Bank of England, something that could help lower the cost of commercial mortgages.

In a survey of eleven financial experts and business representatives carried out by Adfero, nine forecast that a reduction will be made, while two were undecided.

Most of the analysts estimated that a 50 basis point cut is the most likely outcome of next week's monthly meeting of the Bank's monetary policy committee (MPC).

Simon Hayes, a UK economist for Barclays Capital, said of the MPC: "I assume they will take rates as low as they can before they start quantitative easing."

And Howard Archer from Global Insight claimed that a 50 basis point reduction will be announced, but added that it will not be "quite the forgone conclusion that other recent cuts have been".

The base rate currently stands at one per cent following February's decision by the MPC to lower it from 1.5 per cent.