MPC will use rate tool 'to the max'

News Category: Marketing

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Letting agents should expect further interest rate cuts early this year, an economist has said.

Paul Dales of Capital Economics believes interest rates will probably reach zero per cent in 2009 as the Bank of England wrestles with the UK economy's downturn into recession.

His prediction comes ahead of tomorrow's vote on the base rate by the Bank's monetary policy committee (MPC).

Last month, the worsening economic climate prompted the MPC to cut interest rates by 100 basis points, from three per cent to two per cent.

Mr Dales commented that the Bank will use all of its power to encourage economic recovery by cutting the base rate.

"The MPC will just want to use up its interest rate tool to the max because it knows how it works and what impact that can have," he said.

Letting agents could consider property software to ensure they are in the know about the affect interest rate cuts could have on activity within the residential lettings market.

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