Interest rates ‘to reach 4.5 per cent this year’

Posted 2008-02-15

The UK is set to avoid a full recession and interest rates are likely to fall to 4.5 per cent in 2008, one expert says.
Finance gurus at Global Insight also predict interest rates will again fall - to four per cent in the first half of 2009.Howard Archer, a top economist with the firm, said: “We currently forecast interest rates to fall to 4.5 per cent by the end of 2008 and to four per cent in the first half of 2009.
“This is based on our assumption that the UK will avoid recession, but will see extended below-trend growth.”

He added the company forecasts GDP growth to be limited to 1.8 per cent in 2008 and 2009 - ‘the equal weakest performance since 1992′.

The latest interest rate decision is due to be made on Thursday, and, with it currently standing at 5.5 per cent, it is expected to be cut by at least a quarter per cent.

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