7
Jan
Poll predicts base rate could reach 1%
The outcome of tomorrow's monetary policy committee (MPC) meeting
will be a base rate cut, a new poll has predicted.
Out of 13 economists, financial institutions and business
organisations polled by Adfero, the majority opted for a drop of
0.5 or one per cent, with Howard Archer of Global Insight the only
economist to forecast a 0.75 per cent reduction, while Martin
Gahbauer, senior economist at Nationwide, said the cut will be
"bigger" than expected.
Six of the remaining 11 economists questioned plumped for a full
one per cent drop and the other five suggested a 0.5 per cent or
"modest" cut would be more probable.
Explaining his expectations of a one per cent cut, group economist
at Halifax Martin Ellis stated: "Our prediction is based on comment
coming from Bank of England officials and the tone of the latest
MPC meeting."
A reduction to the base rate of interest could lead to cheaper
mortgage deals, something which could impact on first-time buyer
decisions.
Last month, the MPC voted unanimously to cut the base rate by one
per cent to its current level of two per cent - the third
consecutive month the rate has fallen.