Base rate will remain static, predict economists

Next month’s monetary policy committee are likely to vote for no change on the interest rate, if a poll of leading economists is to be believed.

The survey by Adfero found that of eight participants polled, all predicted the current interest rate of 5.25 per cent will remain static.

At the February meeting, the base rate was cut from 5.5 per cent to 5.25 per cent.

Jeavon Lolay, economist for Lloyds TSB, stated that the committee is likely to wait until gross domestic product data for the first quarter of 2008 to be delivered and inflation rates are fully understood before making further cuts.

“With it being the month of the UK budget, although that shouldn’t influence the Bank’s decision, they may want to wait to see what factors and considerations are taken into the Budget,” he added.

Both Ross Walker, economist for the Royal Bank of Scotland, and Simon Hayes of Barclays Capital predicted that the next quarter-point cut would come in May.

© Adfero Ltd

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