Rate cut means "return to normality" - commercial mortgages

10 November 2008

The Bank of England's base rate cut will help the commercial mortgages sector to "return to normality", it has been suggested.

James Roberts, the head of central London commercial research for Knight Frank, has hailed the monetary policy committee's (MPC) decision to cut interest rates to three per cent.

"It is good to see the Bank of England taking aggressive action to support growth," he remarked, adding that while the cut will not solve immediate problems, it is "certainly a step in the right direction" for the commercial market.

He noted that the MPC's recent action has been more in line with the US Federal Reserve's "proactive" approach to supporting economic stability.

Meanwhile, Richard Dingwall-Smith, chief economist for Scottish Widows Investment Partnership, has predicted that the MPC will maintain the rate at its current level, with further reductions being made in early 2009.

Rates will probably be kept "very low" well into 2010, he added.