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No rate relief for borrowers?
6 May 2008 11:30
Borrowers hoping for a base rate cut this week to lower the cost of mortgage products may be set for a disappointment, according to a new straw poll of industry experts.
Last month, the Bank of England's Monetary Policy Committee (MPC) opted to reduce the base rate from 5.25 to five per cent, the third such cut in the space of five months, with the rate now at its lowest level since the start of last year.
However, all nine commentators surveyed by Adfero have forecast that the MPC will vote to hold the base rate at five per cent when it meets on Thursday May 8th, with the threat of inflation remaining a major factor in its members' thinking.
On the other hand, Richard Snook from the Centre for Economics and Business Research and a spokesperson for Nationwide both asserted that there was still a 30 per cent chance of a rate reduction this week.
Howard Archer from economic analyst Global Insight also conceded that this possibility was growing by the day, while, looking further ahead, both HSBC's Karen Ward and Barclays Capital's Simon Hayes have predicted that there will be another cut by June.
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