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22 Jan 08 - Bank 'Set To Cut Rates Three Times'
Buy-to-let investors will receive a boost during 2008 as
the the Bank of England is set to cut interest rates at
least three times, a new study predicts.
Respected economic forecasters at Ernst & Young's Item
Club believe the Bank's Monetary Policy Committee will move
to reduce the cost of borrowing from its current 5.5% level
to prevent a severe recession.
They claim interest rates will be slashed to 4.75% or even
lower by 2009 as policymakers look to counter an anticipated
drop in UK GDP from 3.1% in 2007 to 1.8% this year.
The experts have also revealed the credit crunch which
caused turbulence in money markets and created problems
for mortgage lenders is starting to ease.
Peter Spencer, chief economic adviser to the Item Club,
said: "We are facing serious problems as a nation of
borrowers, particularly the Chancellor.
"However, it is important to put these into perspective.
The economy is fundamentally sound, the problems in the
inter-bank market seem to be resolving themselves, employment
is high and inflation under control despite the inflationary
threats from world commodity and currency markets."
News items supplied by SelectNews, produced by PA Business,
part of the group that owns The Press Association, the UK's
national news agency. Copyright (c) PA Business 2007.
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