Just one more cut, forecasts RBS

The Royal Bank of Scotland (RBS) has forecast that there will only be one more reduction in interest rates by the Bank of England monetary policy committee (MPC) this year.

Speaking on the eve of the monthly MPC meeting to set interest rate policy, RBS predicted that there will be no change this month or in April, with the most likely date of the next cut being May.

In addition to this, it said that would be the only further reduction this year, with the rate remaining unchanged at five per cent until 2009.

A limited reduction such as this may do little to reignite the housing market and stimulate the building of new homes, which may lead more aspiring homeowners to consider the self build option.

The National Association of Estate Agents has called for a cut this month, with chief executive Peter Bolton King stating that the housing market is suffering from an "ongoing lack of confidence".


© Adfero Ltd