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City bets on rate cut of more than a half-point
4 Nov 2008The City was today betting the Bank of England could cut interest rates by more than half a percentage point on Thursday as it fights recession.
The monetary policy committee is expected to cut rates from 4.5% to 4% but nearly one in three economists now reckon there could be a deeper cut, with some predicting a reduction to 3.5%.
Andrew Smith of KPMG said: "The sooner the MPC lowers interest rates, and the further they fall, the more likely it is that the worst effects of the downturn can be averted. A full point off interest rates this week would be a good start."
TUC general secretary Brendan Barber called for a 1.5 percentage points cut to 3%. It came after another dismal month for Britain's builders and an aggressive interest rate cut in Australia.
The Chartered Institute of Purchasing and Supply said its barometer of activity in the construcion industry sank to 35.1 last month, the worst since records began 11 years ago and well below the 50 cut-off point between boom and bust.
The Reserve Bank of Australia cut its benchmark interest rate from 6% to 5.25%.
Reader views (1)
If the reductions are not passed on by Building Societies, so what!!!!!
- John, London, 05/11/2008 13:01
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