Bank of England expected to hold rates steady

Source: Exec Digital UK

Date :04/09/2008 09:56:19

The Bank of England looks set to keep interest rates at five percent for a fifth month running, the faltering economy may well force it to make cuts soon.

With inflation more than double the central bank’s target, most analysts are today, September 4, expecting the Monetary Policy Committee to leave interest rates unchanged.

But, given the speed and scale of the economic slowdown, most are convinced a rate cut is just a matter of time.

Britain’s economy failed to grow in second quarter for the first time since the early 1990s and many, despite PM Gordon Brown’s best efforts, predict a bleak future, with some even suggesting the country has already tipped into recession.

House prices have fallen more than 10 percent in less than a year and few believe a package of measures unveiled by the Government this week will be enough to stop the rot.

With unemployment rising and real incomes falling, consumer confidence is at rock bottom and retailers are feeling the pinch.