Zero per cent rates not impossible, Hargreaves Lansdown says

It has been suggested that in the current economic climate, zero per cent interest rates are "not impossible".

Potential self builders who are looking to arrange mortgagefinance may be happy to hear that Mark Dampier, head of research at Hargreaves Lansdown, is expecting interest rates to be slashed to one per cent by February 2009.

Mr Dampier is also not ruling out the possibility of rates dropping to zero.

"If they go to one per cent they have not been one per cent ever in this country, or not since the Bank of England was formed in 1694", he claimed.

Mr Dampier says that rates have been at zero in Japan for years and they are only marginally above that at the moment. He also suggests it could "easily" happen in America.

During questions in parliament on November 17th, Gordon Brown claimed that deflation was now a real threat to the UK economy.