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Hopes of UK interest rate cut grow after Australian move

HOPES were growing today that interest rates in the UK are to be slashed after Australia's central bank cut its rates by one per cent.

Economists say that the Bank of England's monetary policy committee, which begins its monthly interest rate meeting tomorrow, may slice 0.5 per cent off the rate in a bid to boost the flagging economy.

A reduction in rates to 4.5 per cent would be a big boost to homeowners, businesses and other borrowers.

It will also buoy investors who have been rocked by a grim British Chambers of Commerce (BCC) report published today that says the UK economy is well on its way to recession.

The BCC said it would continue to favour an interest rate cut from five per cent to 4.5 per cent, and expects interest rates to come down to four per cent by the end of this year and to three per cent in 2009.

It is also calling for the government to slash business taxes.

http://news.scotsman.com/uk/Hopes-of...ate.4564769.jp