5
Nov
Interest rate cut deemed unlikely
Pressure on mortgage holders is unlikely to be relieved by an
interest rate cut this week, according to financial experts.
The bank of England's monetary policy committee is set to meet to
determine December's rate on Wednesday, with some calling for a cut
to alleviate the impact on banks due to the global credit
crunch.
However, according to analysts, recent developments such as a jump
in retail sales volume, coupled with figures from Nationwide
showing that house price growth was up 1.1 per cent during October,
are likely to prompt the Bank to hold rates.
Philip Shaw, chief economist of Investec, told the Associated
Press: "Recent figures have been stronger than expected, implying
that if the economy is slowing down, it is doing so from a position
of some strength.
"Some degree of resilience in the housing market may remain. We now
believe that the solid momentum of the economy will probably
persuade the MPC to keep rates on hold."
Should the mpc act as predicted and keep interest rates at 5.75 per
cent, it will be fourth month in a row in which rates have been
held.
