RBS predicts deep rate cuts
Big cuts in interest rates from the Bank of England are anticipated by economists at RBS, the firm said yesterday.
The comments come a week before the Bank's Monetary Policy Committee (MPC) decides on whether or not to cut the base rate.
Currently at 5.25 per cent, RBS claim that the rate could drop as far as 0.75 per cent within a year - in a bid to provide stimulus to an apparently slowing economy.
Base rate reductions generally make interest repayments on personal loans and home loans cheaper - providing a powerful incentive for consumers to take out credit and continue spending.
Global economist at RBS, Ross Walker, said: "The MPC will [probably] lower rates in April.
"We expect a further quarter-point cut to follow in the summer, [before] a final 0.25 per cent reduction to 4.5 per cent in [the first quarter of] 2009."
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