Financial experts predict interest rate freeze

Wed, 09 Nov 2005

Financial analysts believe that we will wait until next year for the next interest rate cut by the Bank of England's Monetary Policy Committee (MPC).

All of the 44 financial experts polled by Reuters have said that when the MPC meets tomorrow, they will vote to hold the interest rate at 4.5 per cent.

If this happens, it will be the third month in a row that the interest rate will remain steady after it was cut by 0.25 per cent in August.

The financial experts' predictions looked very different a few weeks ago, when the majority predicted that the MPC would cut the interest rate once more before Christmas.

Howard Archer, chief UK economist at Global Insight consultancy, told Reuters he believes the likelihood of a November interest rate cut "appears to have disappeared completely from the radar".

He pointed out that a few weeks ago, and interest rate cut "seemed a very realistic possibility".

The majority of financial analysts who were polled said an interest rate cut before February 2006 is unlikely.

Some have predicted that the MPC's next decision to change the interest rate would be an increase in the rate of borrowing.

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