Rate cut 'could be likely'

Experts continue to mull the likelihood of the Bank of England's monetary policy committee (MPC) cutting interest rates this year, with another expert suggesting that it is very probable.

Martin Gahbauer, senior economist at Nationwide Building Society, told the FT Adviser that unless the MPC acts, there could be a downturn in UK economic growth or problems with rising inflation.

He predicted that the MPC would reduce rates to five per cent, after which they would be held for the remainder of the year.

Previously, a survey conducted by Fairinvestment.co.uk found that more than one in five (21 per cent) of respondents believed that rates would go down to five per cent this year.

Meanwhile, a further 56 per cent said that they thought it likely that the MPC could slash rates even further.

Some 29 per cent thought a cut to 4.75 per cent was likely and 27 per cent anticipated a cut to 4.5 per cent.


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