Experts rule out June rate rise - commercial mortgages

30 May 2008

A panel of experts has unanimously agreed that the most probable decision when the Bank of England''s monetary policy committee (MPC) meets next month will be the holding of the present base rate of five per cent.

The eight polled by Adfero all predicted such a move, with the current rate of inflation mentioned as a reason for the rate not being cut.

However, this also means that the experts are not anticipating a rise in the base rate in response to the recent jump in the consumer prices index rate to three per cent, despite the fact that if it goes any higher this will oblige Bank of England governor Mervyn King to write an open letter to chancellor of the exchequer Alistair Darling explaining how the MPC will respond.

Furthermore, one of those predicting a hold in June, chief UK and European economist for Global Insight Howard Archer, has said that rates may be cut again as early as August, with the base rate possibly falling as low as four per cent next year, reports moneynews.co.uk.

Such reductions could lower the cost of commercial mortgages.