7 April 2008
Tightened credit conditions in the aftermath of the credit crunch have meant that the Bank of England is likely to drop the base rate of interest this week, one official has claimed.
Chief UK and European Economist at Global Insight Howard Archer noted that the "downside risks" that have come from this development means that a cut is on the cards.
But he suggested that the decision from the Bank's monetary policy committee will be a "close call", something that might be of interest to those with personal loans.
Mr Archer also asserted that further trimming to the base rate could occur later this year and into 2009.
"We believe that the increasing downside risks to UK growth stemming from tight credit conditions will prompt the Bank of England to trim interest rates by a further 25 basis points to 5%," he commented.
The decision by the Bank is due to be released on April 10th. Currently, the rate stands at 5.25%, after a cut in February.
© 2008 Adfero Ltd
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