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24 Oct 07 - Experts Predict Interest Rate Cuts
Homeowners with tracker mortgages could see their monthly
payments fall twice over the next seven months after experts
predicted interest rates could be cut to 5.25%. They made
the claim despite recent figures showing that the economy
grew more than expected over the summer.
Economists are forecasting that the Bank of England will
cut rates twice, once before February and again in May,
to leave the rate at 5.25%. The prediction comes after Ernst
& Young's influential Item Club published its latest forecast
for the economy, which warned that growth may slow to 2.1%
in 2008 due to the effects of the global credit crunch.
Before the money markets were hit by the fall-out from the
turbulence relating to the collapse of the US sub-prime
mortgage market, it had predicted that growth would be 2.5%
for next year.
Barclays Capital, which had been forecasting interest rates
to remain at 5.75% for at least six months, said it now
expects rates to hit 5.25% by May, with a cut before February
a possibility if early signs show growth slowing.
Source: Barclays Capital
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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