Majority forecast rate cut - commercial mortgages

03 April 2008

The majority of economists and experts in a poll have predicted that the Bank of England''s monetary policy committee will cut the base rate by 0.25 per cent next week, a move that may lead to cheaper commercial mortgages.

Of the eight polled by Adfero today, six tipped a cut to occur while two, on behalf of HSBC and Lloyds TSB, expected the rate to remain on hold at its present level of 5.25 per cent.

However, the two economists who stated there would be no change this month forecast that the cut would only be delayed until next month.

Elaborating on his prediction, Lloyds TSB senior economist Jeavon Lolay said his view was tentative, explaining: "With May we just feel it''s slightly more favourable, because it''s timed with the Bank of England''s latest inflation report.

"But we wouldn''t be too surprised if they did go down in April."

If the rates are trimmed this week it would be the third time in five months that the base rate had been reduced, following 0.25 per cent cuts in December and February.