5 Nov

Interest rate cut deemed unlikely

Interest rate cut deemed unlikely

Pressure on mortgage holders is unlikely to be relieved by an interest rate cut this week, according to financial experts.

The bank of England's monetary policy committee is set to meet to determine December's rate on Wednesday, with some calling for a cut to alleviate the impact on banks due to the global credit crunch.

However, according to analysts, recent developments such as a jump in retail sales volume, coupled with figures from Nationwide showing that house price growth was up 1.1 per cent during October, are likely to prompt the Bank to hold rates.

Philip Shaw, chief economist of Investec, told the Associated Press: "Recent figures have been stronger than expected, implying that if the economy is slowing down, it is doing so from a position of some strength.

"Some degree of resilience in the housing market may remain. We now believe that the solid momentum of the economy will probably persuade the MPC to keep rates on hold."

Should the mpc act as predicted and keep interest rates at 5.75 per cent, it will be fourth month in a row in which rates have been held.

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