End to growth may speed rate cut - buy to let mortgages

22 August 2008

New data has revealed that the UK economy failed to grow between April and June this year, bringing to an end a record run of 63 successive quarters of expansion.

The Office for National Statistics revealed today that growth has hit zero after previously estimating a 0.2 per cent increase in output in the quarter.

Such news suggests a more pronounced slowdown is taking place than previously thought, which may in turn mean that downward pressure on inflation could be greater than anticipated, making it possible for the Bank of England's monetary policy committee (MPC) to cut the base rate at an earlier date.

This could mean a lowering of the cost of buy to let mortgages.

Minutes of the August MPC meeting showed that the 0.2 per cent growth figure was the one being factored into its considerations as the members deliberated before deciding to hold the base rate at five per cent.

It also noted that the central projection is that flat growth will bring inflation down in the months ahead.