The Bank of England's Monetary Policy Committee (MPC) made a unanimous decision to cut interest rates at the beginning of December, it was revealed today.
Minutes from the MPC’s latest meeting show all nine members of the committee voted to cut the rate to 5.5%.
Analysts say the unanimous vote could signal a further rate cut early in 2008, maybe as early as January.
It was previously thought that a few members of the MPC would have voted to keep rates at 5.75% as inflation is currently above the Government’s target of 2%.
However, signs of a slowing economy may have prompted to MPC to act urgently to boost customer spending during the Christmas period.
Stuart Law, chief executive of Assetz, believes the current rate of inflation, 2.1%, is low enough to warrant further rate cuts next year.
He says: “I look forward to significant interest rate reductions being comfortably achievable early in 2008, and I would expect rates to be down to 5% by August next year.
“In fact, it is quite possible that the Bank of England will go further and reduce rates to 4.5%, or even lower, with the current inflation data suggesting this level of interest rate reduction is achievable, without necessarily inducing inflationary effects.”
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