Experts forecast 2008 rate cuts


Fri 7th Dec, 17:21:22 GMT

Interest rates are likely to be cut further in 2008, several major financial institutions have predicted.

The Bank of England reduced rates to 5.5 per cent yesterday, despite predictions that they would wait until the New Year before making any changes.

However, according to Susan Hannums, savings manager for AWD Chase de Vere, cuts are "on the cards" for 2008.

"In the long term there is obviously a feeling in the market that interest rates are going to be coming down," she said, adding that next year is likely to see reductions.

Trevor Williams, UK chief economist for Lloyds TSB, concurred, forecasting that the Bank would drop rates to five per cent by the end of the year.

"There will be a cut, probably in May, and another one mid-year," he said.

A spokesperson for the Centre for Economics and Business Research said that the organisation believed rates would be at 5.25 per cent before the end of the second quarter next year and fall further in the following three months.ADNFCR-1143-ID-18386707-ADNFCR


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