The Bank of England will keep interest rates on hold this month, but slow economic growth may cause a further reduction at the end of this year or the beginning of 2006, finance experts have predicted.
A Reuters poll of economists said they expected the Bank's Monetary Policy Committee (MPC) to keep rates at 4.50% next week. The median forecast predicted that rates would be cut to 4.25% by the end of March 2006 and would stay at that level until the end of next year.
In August's MPC meeting, four of the committee's members voted for keeping the rates on hold. John Hawksworth of PriceWaterHouseCooper expects another rate cut sometime next year, whilst 17 of the 47 economists surveyed predicted the next move would be a cut in the final quarter of this year.
A number of experts believe that the economy is not doing as badly as some had originally thought and predicted a reversal of the August cut some time next year.