11 Aug

Bank of England backed to cut rate

Bank of England backed to cut rate

An economic advisor has delivered the latest forecast of a series of cuts in the base rate by the Bank of England next year.

Roger Bootle, who advises business analysts Deloitte, told the Business Desk that the Bank of England's monetary policy committee (MPC) is likely to make major cuts in the year ahead with the economy heading for recession.

He stated: "Interest rates will, eventually, have to fall very far to lift the UK economy out of its current malaise."

Mr Bootle said the base rate may drop to 3.5 per cent or even lower.

This is the latest in a number of similar predictions suggesting there will be radical action by the MPC once it feels the threat of rising inflation is subsiding.

Another such forecast came last week from Scottish Widows Investment Partnership, which said there will be four trimmings of the rate in spring and summer next year to lower the rate to four per cent.

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