UK interest rates cut expected as recession fears grow
The Bank of England is expected to push the button on the first cut in interest rates for more than seven years today as the economy falters in the wake of the Brexit vote.
Economists predict that policymakers on the Bank’s Monetary Policy Committee (MPC) will vote to slash rates to a new historic low in an effort to ward off the threat of recession.
Ben Brettell, senior economist at Hargeaves Lansdown, said it was “almost certain” that rates will be cut, with financial markets pricing in a reduction from 0.5% to 0.25%.
Bank governor Mark Carney signalled in the wake of Brexit that rates would come down in July or August and the MPC surprised economists and investors when it kept rates on hold.
A rate cut would be the first since March 2009, when the Bank slashed rates to the all-time emergency low of 0.5% at the height of the financial crisis. It would be good news for borrowers, but spell misery for savers.