06 Mar, 2008
Marcel Le Gouais
Bank of England's Monetary Policy Committee has held interest
rates at 5.25%.
The decision comes despite expectations that there could be up to
three interest rate cuts this year, the first of which came last
month as the rate was slashed to 5.25%.
The Council of Mortgage Lenders, which is predicting three cuts
this year, says base rate is just one of many factors that
determine the cost of funds to lenders.
The trade body says that even if further interest rate cuts
emerge, it should not be assumed that this will automatically
result in a cut in lenders' standard variable rates or discounted
Research from BM Solution reveals that brokers are also expecting
further interest rate cuts this year.
Nearly half of brokers (49%) questioned believe that the interest
rate won't dip below 5% this year.
More than a third expect rates to drop as low as 4.5%, which would
require another three reductions.
The vast majority of brokers (83%) believe that they have seen the
rate peak for 2008, believing that 5.5% was the highest it would be
Just over a third of brokers believe that the year will end with a
rate of 4.75%, whilst 47% think 5% is more likely.