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Economists expect rate cut
04 April 2008
Six out of eight economists are predicting an interest rate cut when the Bank of England (BoE) hands down its decision next Thursday.
Despite fears of inflation hanging over the UK economy, many economists feel that worsening conditions in credit markets will cause the Monetary Policy Committee, the group which sets interest rates, to cut them by 0.25 per cent.
Howard Archer, UK chief economist with Global Insight, predicted that interest rates would fall but said the Bank would remain cautious on the inflation outlook.
Lloyds TSB senior economist Jeavon Lolay, disagreed with that view, predicting that inflation concerns would cause the BoE to leave rates unchanged, even though it was a close call.
"It's just a close call between whether that's [the interest rate cut] done in April or May. With May we just feel it's slightly more favourable, because it's timed with the BoE's inflation report," he said. 
