The Money Stop

The increasing downside risk due to the credit crunch is one of the reasons behind a possible interest rate cut by the Bank of England (BoE) next week, financial analysts have predicted.

Experts from six financial institutions including the Centre for Economic and Business Research, Global Insight, Nationwide and Barclays Capital, all anticipate that BoE’s monetary policy committee (Mpc) to cut rates by 0.25 per cent in April.

Lloyds TSB and HSBC said that there would be no change in rates this month.

Howard Archer, UK chief economist at Global Insight, said: “We believe that the increasing downside risks to UK growth stemming from tight credit conditions will prompt the Bank of England to trim interest rates by a further 25 basis points to 5.00 per cent at its April meeting.”

The decision by the Mpc on interest rates will be announced at 12 noon on April 10th after its monthly two-day meeting.

Currently interest rates stand at 5.25 per cent.

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