Poll forecasts no rate reduction

Those hoping for another interest rate reduction next month that could lead to a fall in the cost of mortgage repayments will be disappointed, a group of eight economists and financial institutions have predicted.

An Adfero poll revealed a unanimous forecast that the Bank of England's monetary policy committee (MPC) will vote to hold the base rate at 5.25 per cent when it meets on March 5th and 6th.

Inflationary pressures will be one major reason why the MPC will avoid a cut, according to Lloyds TSB economist Jeavan Lolay, Global Insight chief economist Howard Archer and Ross Walker of the Royal Bank of Scotland.

In addition to this, both Simon Hayes at Barclays Capital and Halifax chief group economist Martin Ellis predicted no change in April either, both tipping the next reduction to occur in May.

Such a situation may persuade some to explore the option of self build on cost grounds.

The MPC has never changed the base rate in successive months in its ten and-a-half year history.

In between the rate reductions of December 2007 and this month it voted by eight to one to hold the base rate in January.



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