11 Apr

Rate decision 'will boost confidence'

Rate decision 'will boost confidence'

Confidence among consumers may well be aided after the Bank of England's monetary policy committee (MPC) decided to drop the base rate of interest to five per cent, it has been claimed.

Chief economist at Abbey Barry Naisbitt stated that a slowdown in the economy undoubtedly had a say in whether rates would be altered at this stage.

According to Mr Naisbitt, the development marks a "forward-looking view" from the bank and that a rate cut was possible because the focus is upon medium-term concerns.

He commented: "The MPC has taken a forward-looking view that slower growth is likely to reduce medium-term inflationary pressures and has been able to cut rates because of its focus on medium-term inflation."

The official added that the body is due to watch both growth and inflation keenly in the months ahead.

A rate trimming by itself is not good enough to boost the market, as more liquidity is needed, the Council of Mortgage Lenders said in response to the cut.ADNFCR-1222-ID-18548629-ADNFCR

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