2
Oct
MPC 'has scope for rate cut'
The Bank of England's monetary policy committee (MPC) has more
scope to cut interest rates next week after the publication of
further evidence to show that Britain's economy is slowing, an
economist has said.
Simon Hayes of Barclays Capital told the Financial Times that
recent news - such as figures from the Chartered Institute of
Purchasing and Supply/Markit purchasing managers' index showing a
further drop in manufacturing output - will make it "relatively
easy for the MPC to sell a rate cut as being consistent with
hitting the inflation target in the medium term, even as inflation
hits five per cent".
Mr Hayes has now forecast a rate cut, something former cabinet
minister John Redwood called for this week at a Conservative Party
conference fringe meeting.
A reduction in the base rate could mean cheaper mortgages for those
looking to get on the housing ladder.
The September MPC meeting saw it vote by eight to one to hold the
base rate at five per cent.
