Hopes of another rate cut by the MPC in the coming months in view of the economic gloom across the country now seem dreary as the Bank of England is clearly not considering any such interest rate slash in the near future.
The Monetary Policy Committee has adhered to 4.5% as the interest rate, albeit with a dull economic environment. The rate cut in August that came after a long wait of two years and rendered borrowing easier for homeowners has pushed up expectations of a further rate cut. However, analysts think that no further changes to the interest rate will be done till New Year at least.
The economy, meanwhile, is still struggling hard to recuperate, what with the annual economic growth rate level in the UK declining to the lowest ever level over the past 12 years. Moreover, the anguish seems to be persistent on the high street, as a series of poor performances and low trading updates are hitting charts even from big names like HMV, Boots and MFI. Worried retailers said that consumers seemed to be almost groaning under the pressure of high oil and fuel prices, since they had conspicuously reined in ever since a hike in crude oil prices was affected.
Some economists also believe that the MPC could consider a rate cut even in November since the current state of the economy doesn’t look too good and may in all probabilities lag far behind growth forecasts of the BoE.
Posted
on : Thu, 06 Oct 2005 11:25 GMT | Banking News
By : Mark Richardson
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