MPC ''is set to cut rates tomorrow'' - commercial mortgages

05 December 2007

Firms with commercial mortgages are set to receive a boost tomorrow when the Monetary Policy Committee (MPC) meets to set the base rate of interest for December, according to one firm.

Global Insight has said that it has revised its rate forecast following the publication of less positive data from the likes of Nationwide and Halifax this week, regarding consumer confidence and house prices respectively.

The firm has said that the decision "remains one of the tightest calls ever" but believes that the MPC will believe that action is now necessary.

"We expect a majority of MPC members to come to the conclusion on Thursday that a 25 basis point interest rate cut to 5.5 per cent is justified to counter the increasing downside risks to growth," said Howard Archer, chief UK and European economist at the firm.

However, Trevor Williams from Lloyds TSB has said that "there will be a cut in February 2008" but not before.