Sales figures prompt rate cut

New data on retail sales figures have prompted economists to predict that the Bank of England is very likely to cut interest rates in February.

Such a move may make bring down the cost of loans to buy land.

Figures from the Office for National Statistics (ONS) show that the rate of sales growth in the three months to December 2007 was down to 0.4 per cent from one per cent a month before.

Economists responded by stating this was a clear sign of an economic downturn and argued this would make a rate cut almost certain.

Vicky Redwood from Capital Economics told the BBC: "Surely this is enough to cement a February rate cut and more cuts thereafter," while Ian Kernohan of Royal London Asset Management predicted a cut of 0.25 per cent or more.

The Bank of England monetary policy committee will announce its next rate decision on February 7th.


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