Bank of England 'expected to cut rates this week'

A recent poll has revealed that most commentators believe the Bank of England will cut interest rates on Thursday.

In a survey of 12 economists, financial institutions and business organisations, five predicted that the central bank will hold rates while seven predicted that rates will be cut when the panel meet later this week.

The decision by the Monetary Policy Committee (MPC) will be announced at midday on October 12th with rates currently standing at five per cent, a position that has been maintained since April.

Howard Archer, chief UK and European economist at Global Insight, expects interest rates to be cut by 25 basis points from five per cent to 4.75 per cent and "would not be surprised if there was a 50 basis point cut".

According to the Press Association, most commentators expect interest rates to be at 4.5 per cent by the end of the year and rates could fall to as low as three per cent in 2009.