22 Nov

Three rate cuts next year, financial analysts predict

Three rate cuts next year, financial analysts predict

The Bank of England is to cut base rates at least three times next year, a global financial analysis firm predicts.

Global Insight did not predict when the cuts would occur but indicated that it thinks that the Bank of England's monetary policy committee (MPC) will have enacted them by the third quarter of 2008.

Howard Archer of Global Insight said: "Given that the MPC believes that some slowdown in growth is necessary to dilute underlying inflationary pressures, a majority of MPC members will probably want to see clear evidence of a significant slowdown before sanctioning a rate cut.

"Whether or not the MPC acts in December or waits until early 2008, we now expect the Bank of England to trim interest rates three times by the third quarter of 2008, taking them down from 5.75 per cent to five per cent," he added.

News of Mr Archer's projections comes as it was this week revealed that seven of the MPC's nine members voted against a cut in November’s meeting.


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