03-12-2007
Markets divided over interest rate direction
The financial markets are uncertain of the future direction of interest rates in the UK.
A minority of economists expect interest rates to increase this month, but according to the results of a poll of 61 economists by Bloomberg, financial markets remain uncertain, instead opting for evenly split odds of 50-50, reports the Financial Times.
In November, of those polled by Bloomberg, four out of a total of 47 expected interest rates to fall below their current rate of 5.75 per cent this month.
"They will want to see more evidence that the slowdown in the economy is damping inflation before they move,'' said Jonathan Loynes, chief UK economist at Capital Economics "A cut is coming sooner or later. It's very close, and I won't be surprised if they do," he added.
In other news, which may affect the Bank of England's forthcoming decision over interest rates, the price of oil has slipped to $88.71 (£42.97) a barrel on New York's Mercantile Exchange.