Consensus collapse reduces rate cut prospects, says economist

The chances of a quicker process of interest-rate trimming by the Bank of England that could help bring down the cost of mortgages has receded, an economist has said.

Responding to news that the Bank of England's monetary policy committee (MPC) was split in three ways over the base rate decision this month, the first such division since May 2006, Royal Bank of Scotland economist Ross Walker concluded that the "consensus" over rates was crumbling sooner than he thought it might.

He added: "I don't think this is going to prevent further rate cuts but the idea of easing at an accelerated pace is looking pretty unlikely."

Such news may prompt those who were hoping for more rate cuts soon to consider cheaper ways of getting on the housing ladder, such as self build.

The MPC vote was the first since last July to see a decision made with the support of less than seven of its nine members.


© Adfero Ltd