28 November 2008
It would not be impossible to have 0% interest rates in the current economic climate, according to the head of research at Hargreaves Lansdown.
Mark Dampier said interest rates are likely to fall to 1% by February and could fall even further if the economy continues to decline.
His comments come before the Bank of England's monetary policy committee holds its next rate-setting meeting on December 4th.
This month, it cut rates by 150 basis points bringing them to 3% - the lowest level since 1955. Mr Dampier said further cuts will be bad for savers.
However, consumers with secured loans could see their repayments reduced if lenders pass on the reductions.
Commenting on the possibility of 0% rates, he said: "They could easily go there in America so it is not inconceivable given that these are unprecedented times."
Meanwhile, Paul Dales, UK economist at Capital Economics, has predicted that the monetary policy committee will cut rates by 100 basis points next week.
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