With the Monetary Policy Committee meeting due to take place this week a number of economists have given their views on whether the base rate is likely to fall again or whether it is likely to remain static. A recent poll carried out by Reuters showed that the vast majority of economists were expecting the base rate to stay on hold, with only five out of sixty five economists that were polled predicting that the base rate could fall again this month.

After the April MPC meeting the Bank of England cut the base rate by 0.25%, taking it from 5.25% to 5%. However, most economists think that it is unlikely that the base rate will fall two months in a row given the rising concerns over inflation levels, which the central bank also has to consider when looking at loan interest rates. Most now think that the next base rate cut will be in June.

Alan Clarke, an economist at BNP Paribas, said: “We believe June is a much better bet for the timing of the next interest rate cut. A move in June would maintain the recent pace of one cut every two months. It would also allow the accumulation of more concrete evidence that the economic data are deteriorating.” However, one member of the MPC has said that if rates are not cut aggressively the country could go into recession and house prices could fall by a third.

Other economists predicted that interest rates would fall more steadily, unlike the situation in the United States, where they have been cut seven times since September. One economist said: “We think that after a pause this week the Monetary Policy Committee will cut interest rates again in June and eventually all the way to 3.5 percent.”