7 Jan

Poll predicts base rate could reach 1%

Poll predicts base rate could reach 1%

The outcome of tomorrow's monetary policy committee (MPC) meeting will be a base rate cut, a new poll has predicted.

Out of 13 economists, financial institutions and business organisations polled by Adfero, the majority opted for a drop of 0.5 or one per cent, with Howard Archer of Global Insight the only economist to forecast a 0.75 per cent reduction, while Martin Gahbauer, senior economist at Nationwide, said the cut will be "bigger" than expected.

Six of the remaining 11 economists questioned plumped for a full one per cent drop and the other five suggested a 0.5 per cent or "modest" cut would be more probable.

Explaining his expectations of a one per cent cut, group economist at Halifax Martin Ellis stated: "Our prediction is based on comment coming from Bank of England officials and the tone of the latest MPC meeting."

A reduction to the base rate of interest could lead to cheaper mortgage deals, something which could impact on first-time buyer decisions.

Last month, the MPC voted unanimously to cut the base rate by one per cent to its current level of two per cent - the third consecutive month the rate has fallen.ADNFCR-1222-ID-18959594-ADNFCR

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