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Loan rates could be cut in September

23 June 2005

Minutes from last month's Monetary Policy Committee (MPC) meeting show that two out of the nine members voted for an interest rate cut.

It suggests that the Bank of England's rate-setting body could be not far away from reversing their upward trend of the last year and half.

Bank chief economist Charles Bean and Marian Bell both voted for a cut.

However, the other seven members wanted to keep the rate frozen on 4.75 per cent.

In response the managing director of property investment specialist Assetz, Stuart Law, said: "The two votes for a reduction at the MPC meeting signals that the committee is no longer focusing 100 per cent on maintaining or increasing rates.

"We still consider that 4.75 per cent will be the peak in rates and a 0.25 per cent drop is most likely to be on the cards after August."

Following the latest minutes of the MPC meeting he feels that interest rates will not play a big part in determining future property prices.

A drop in interest rates is expected to be welcomed by retailers. Earlier this month the British Retail Consortium called for a rates cut amid a downturn in the industry.