Rate predictions leave banks divided


Financial experts remain divided about the Bank of England’s next interest rate decision.

Its monetary policy committee is under pressure to further cut rates, although of eight leading financiers polled, two thought a cut was not imminent.

"HSBC predict that will be no change in April but are expecting a 25 point base rate cut in May," a spokesman for the bank said.

Jeavon Lolay, senior economist at Lloyds TSB, said: "Our prediction is that rates are left on hold, at 5.25."

She acknowledged a cut was possible but said it was more likely to come in May.

RBS, Nationwide and Barclays all said the move would be down and Howard Archer from Global Insight agreed. He said it was "increasing downside risks to UK growth stemming from tight credit conditions", which would force the bank to cut rates.

Richard Snook for the Centre for Economic and Business Research and Paul Dales of Capital Economics also predicted a quarter-point cut.

The decision by the Bank of England’s monetary policy committee on interest rates will be announced at midday on Thursday, after its monthly two-day meeting.