30 May 2008
Interest rates could fall to as low as 4% in 2009, one expert has predicted, despite the fact that no change is likely before August.
Chief European and UK Economist at Global Insight Howard Archer noted that the Bank of England will want to see that there is further wage moderation before trimming the base rate rashly.
He suggested that in the present climate, the Bank will "tread extremely carefully" while considering any possible changes, something that may interest those with personal loans.
But while the organisation should take this cautious path, he remarked, the influence of lowering inflationary pressures should force it to decrease rates some point this year.
"We still believe that interest rates could eventually fall as low as 4% in 2009, but it will be a gradual process," he commented.
Last month, the Bank's monetary policy committee decided to hold the rate at 5%, following cuts in April, February and December.