Rate cut a ‘unanimous decision’


Signs that borrowing for commercial property and commercial lettings could become cheaper in the new year have been strengthened by the news that the interest rate cut announced earlier this month was carried by a unanimous decision.

Members of the monetary policy committee (MPC) announced earlier this month that the base rate would be cut by 0.25 per cent, bringing it back to 5.5 per cent.

In the minutes the MPC made clear that it had heeded the potential problems which could affect the business property market, which it hoped would not "discourage construction of new buildings".

Noting the risk of undermining business property, the MPC said the potential downside to a cut in terms of keeping inflation in check was outweighed by the need to free up borrowing and ease the potential risks posed by the credit crunch.

The strength of feeling for the rate cut evidenced by the unanimous decision suggests that further cuts could be on the way in 2008.