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Bank of England expected to cut interest rates
Oct 6 2008 Liverpool Daily Post
THE Bank of England is widely expected to cut interest rates this week.
The Monetary Policy Committee is expected to reduce the official cost of borrowing by 0.25% to 4.75% when it announces the result of its two-day rate setting meeting on Thursday.
But some economists have predicted the MPC will go further and slash rates by 0.5%, following some dire economic data in the past few weeks.
Most commentators now expect interest rates to end the year at 4.5%, before falling to as low as 3% in 2009.
Philip Shaw, of Investec Securities, said: “The world has changed rapidly over the past few weeks and we now expect the MPC to cut the official Bank rate by 25 basis points to 4.75% next Thursday.
“The pace of change in the financial landscape over the past three weeks has been frightening and has spread well outside the confines of the US.”
The latest economic figures show that activity in the manufacturing and service sectors has now fallen to record lows.
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