Rates Likely to Fall to 4.5 Percent This Year
Borrowers could see interest rates of 4.5 percent by the end of the year, says forecasting firm Global Insights.The firm sees rates falling further to 4 percent in the first half of 2009.
The firm expects that slower than expected growth will force interest rates to 4.5 percent by the end of 2008 and to 4 percent in 2009. Nonetheless, they do not predict that the UK will experience a recession, says Howard Archer, chief of European and UK economics for Global Insight.
Growth in GDP will “equal the weakest performance since 1992,” hovering at 1.8 percent in 2008 and 2009, according to Mr. Archer.
Experts expect the interest rate to be cut at least one-quarter of a point this Thursday, when the decision will be made. It is currently at 5.5 percent.