Bank Of England Interest Rate Cut Today? I Doubt It!
Well interest rate decision day is here again! I don’t know if my life is getting busier or time is literally speeding up, but it seems to be coming round faster every month!
My last article focused on the possibility of the Bank Of England dropping interest rates nearer to zero. So to follow up from that can you expect to be paying less on your mortgage from the end of this month? I wouldn’t count on it just yet!
It’s certainly true that the economic picture has worsened over the last few months. In fact recent figures show that we are in a deeper recession than we initially thought this time last month. Inflation has also cooled down in recent months and is now sitting at 3%, this may still be above the Bank of England’s target of 2% but all of this recent data does leave room for a rate cut if the MPC wanted to drop rates this month. So will they?
The problem for the Bank Of England is that if it does decide to drop interest rates again this month, it will effectively leave itself nowhere to go in the future if things get really bad! At the moment most of the attention is still focused on Europe. Yes our economy is bad but no one seems to be making any huge noises for something drastic to be done!
If the recession continues though, which it likely will, people will start making a lot of noise for the Bank Of England to act and my guess is it will not want to have played its card too early and still have somewhere to go with interest rates when that time comes.
So don’t expect anything drastic just yet, but you might have a few extra pounds to spend in the not so distant future!