23 Oct

Interest rate cuts predicted by May

Interest rate cuts predicted by May

Economic analysts have predicted that interest rates could be cut twice by May, providing a fillip for homeowners.

The predicted cuts could leave rates at 5.25 per cent, with the first set to come in February and the second in May, according to analysts from Global Insight.

It is thought that in so doing the Bank of England is hoping to mitigate the impact of the global credit crunch, which is expected to hit the UK's GDP.

Global Insight economist Howard Archer said: "It seems likely that the Bank of England will trim interest rates before too long, even though a November move currently looks an increasing long shot."

Following five rises in the last year, interest rates currently at their highest level for six years at 5.75 per cent, but have been held for the past three months.

Predictions of rises come despite news that the UK's GDP grew by 0.8 per cent in the third quarter, ahead of expectations of a slowdown to 0.7 per cent.


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