Rates 'could be lowered to 2.5%' - commercial mortgages

20 November 2008

A financial expert has estimated that interest rates could fall to 2.5 per cent in the coming months, a move that may be welcomed by people with commercial mortgages.

Commenting on newly-released minutes from the recent meeting of the Bank of England's monetary policy committee (MPC), market strategist Joshua Raymond from City Index said a future cut of 50 basis points is likely.

He stated that the Bank's report "cements the belief" that the base rate will be reduced "sooner rather than later".

"Rates could come down as low as 2.5 per cent or lower in the medium term," he noted.

Mr Raymond's remarks followed a report from the Office for National Statistics that showed inflation has dropped from 5.2 per cent to 4.5 per cent, which gives the MPC more scope to cut interest rates further.

Meanwhile, the MPC minutes revealed that the committee voted unanimously to lower the base rate on November 6th.