Interest rates 'could be cut this week'

06 October 2008

Several financial experts have stated that they expect interest rates to be cut by the Bank of England's monetary policy committee (MPC) this week.

The MPC is due to meet on Thursday October 9th and speculation has been growing that it will slash rates in a bid to rescue the beleaguered economy.

Ross Walker, an economist for Royal Bank of Scotland, claimed that the Bank may take action in order to avoid a "deeper and more prolonged recession".

Howard Archer, chief European and UK economist at Global Insight, also predicted that a cut will be made while Martin Ellis from Halifax said there is a "good chance" that the MPC will make a move.

However, Richard Dodd from the British Retail Consortium remarked that he expected no change, adding: "But we hope we are wrong and would like to see a quarter point cut."

The central interest rate has a significant influence on commercial mortgages as it affects the rates set by banks and building societies.