Limited interest rate cuts February 13th, 2008
The Bank of Englande governor Mervyn King said that the bank faced a “difficult balancing act” and it was “the outlook for inflation, in the medium term” that the central bank’s Monetary Policy Committee (MPC) would remain focused on.
Despite the economic slowdown, falling house prices and mortgage approvals, inflation could reach 3% this year. This means the Bank will not be in a rush to cut interest rates, nor will they go as far as the market hopes. Some analysts still believe that rates could drop to 4.5% by the end of the year but this latest announcement by the Bank would suggest otherwise.
