Interest rates ‘could drop to 4%’
The Bank of England's monetary policy committee (MPC) could push interest rates to as low as four per cent, one expert has predicted.
In a tip off that could mean mortgages become more affordable, Paul Dales of Capital Economies stated that the current rate of 5.25 per cent could be trimmed by 1.25 per cent eventually.
This would mean five separate 0.25 per cent cuts, unless the unlikely event of a bigger drop was decided by the MPC.
The process would also be lengthy as, in its rate decision history, the MPC has never made rate reductions in two successive months.
"We see rates going down to around 4 per cent," Mr Dales said, but feels that the MPC won't reach that level "any time soon".
A recent poll by Reuters earlier this month discovered most economists are predicting two further base rate cuts this year.
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