Rics tips may rate cut - commercial mortgages

07 March 2008

The Royal Institution of Chartered Surveyors (Rics) has predicted that the next cut in the Bank of England base rate will come in May.

Reflecting on the vote yesterday by the MPC to keep the rates at 5.25 per cent, Rics senior economists Simon Rubinsohn said the body had acted "predictably" in view of the current economic climate, which made their verdict an "appropriate" one.

However, in news that will interest those hoping to see reductions in the cost of commercial mortgages, he added that trends in credit markets would make another cut likely soon.

He stated: "Our judgement is that the next move will be in May."

Abbey responded to the MPC announcement with a similar verdict.

Chief economist Barry Naisbitt said the decision was widely expected although some had not ruled out a cut.

However, he added, there is likely to be a shaving of the rate "in the next couple of months".