Another interest rate cut predicted for November

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The Bank of England may cut its base rate again, but probably not until November predicts a survey of 59 leading UK economists.

The consensus amongst the economists, polled by news organisation Reuters, is that another 15 basis points will be sliced from the base rate making it just 0.1 per cent – its lowest ever level.

All but two of the 59 economists polled in the past week said base rate would be left at 0.25 per cent when the BoE’s monetary policy committee next meets on September 15.

However, the vast majority anticipated a wait until November and, once the rate drops to 0.1 per cent, it is likely to stay there until the end of 2018.

Reuters quotes Peter Dixon of Commerzbank as saying: “A further rate cut will depend on the economic evidence. Data has been pretty strong of late.”

“There seems to be a distinct reluctance on the MPC to try negative interest rates, despite other central banks having already experimented with them,” says Paul Hollingsworth at Capital Economics.

On August 4 the BoE cut the rate – for the first time in seven years – taking it from 0.5 to 0.25 per cent. Around 50 per cent of mortgage lenders have made a cut in their interest rates to borrowers since then.

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