10 Jan

Interest rate decision due today

Interest rate decision due today

The Bank of England will announce its latest interest rate decision today, amid speculation from analysts that any financial relief for borrowers may be postponed by another month at least.

Last month the Bank trimmed 0.25 per cent from the base rate interest taking it to 5.5 per cent.

However, with British retailers having recently suffered their worst Christmas trading for three years, the Bank is being called on cut rates by the same margin this month.

Yet, according to Trevor Williams, UK economist for Lloyds TSB, while "there certainly will be a cut in the next few months", the Bank is unlikely to heed calls from retailers.

He added: "My view is that they should leave it until February; because then they will have the new forecast of inflation which [looks ahead] two years, and gives them a better feel for how the economy has performed over the last few months, and how it may perform through the next two years, and what implications this has for the inflation target."

The cut to the rate of interest in December was the first change since July last year.

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