Professional services firm Deloitte has predicted that the UK economy will enter a recession.

Economic advisor Roger Bootle, commenting after the Bank of England's monetary policy committee (MPC) voted to maintain the base rate of interest at five per cent, said that it was too late to avoid at the very least a "long period of very weak activity".

He added: "[The MPC] will probably not be able to cut interest rates until late this year at the earliest. But this will only exacerbate the economic downturn that appears to be gathering pace by the day."

Nationwide Building Society found that the average house price fell by eight per cent in the eight months up to June and Mr Bootle believes a sharp decline of the rate to 3.5 per cent is necessary.

The last base rate decrease came in April, when it was cut by 0.25 per cent.

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