The possibility of the first interest rate cut since August 2005 emerged yesterday after further evidence of a slowdown in housing and consumer confidence.
However, the Bank's Monetary Policy Committee will be wary about cutting rates too early and pushing inflation beyond its 2% target. The decision will be announced at noon today.
Some experts say there is even an outside chance of a half-point rate cut from 5.75%to 5.25%.
Credit problems have bitten again in the last month, effectively tightening monetary policy after the rate at which banks lend to each other - known as Libor - soared. If the Bank cuts rates today, a quarter-point reduction to 5.5% could knock around £16 a month off the cost of a typical £100,000 mortgage. Good news for borrowers, not so good for those with savings accounts.
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