Rate cut belief strengthens among consumers - commercial mortgages

26 November 2007

UK consumers are increasingly of the belief that firms with commercial mortgages will have reason for cheer in the new year as the Bank of England begins to cut rates again.

The latest consumer barometer from Lloyds TSB Corporate Markets has revealed that the number of Britons who expect interest rates to be higher rather than lower in ten months'' time fell by ten percentage points between October and November.

However, the firm also warned that such cuts may be offset slightly by rising goods prices.

"It''s now pretty much expected - by economists and consumers alike - that the Bank of England will begin to cut interest rates in coming months," said Lloyds TSB Corporate markets chief economist Trevor Williams.

"But if prices continue to rise next year, as consumers predict, this will come as little relief to many household budgets," Mr Williams cautioned.

The Council of Mortgage Lenders recently suggested that rates would fall three times in 2008.