Interest Rate Predicted to Fall Through 2008

Posted 2008-02-15

Financial experts, Global Insight, stated recently that they forecast interest rates to fall for 2008 and early 2009. Specifically, Global Insight predicts that by the end of 2008, the interest rate will have fallen to 4.5 per cent, and will continue to fall to 4.0 per cent in the beginning of 2009. Currently, the interest rate is at 5.5 per cent, with an expected cut by the Bank of England of at least a quarter per cent coming on Thursday.
Chief European and U.K. economist at Global Insight, Howard Archer, explains that, “This [prediction] is based on out assumption that the U.K. will avoid recession, but will see extended below-trend growth.”
In addition to the interest rate forecast, Global Insight set the gloomy prediction that the Gross Domestic Product growth will be “the equal weakest performance since 1992,” of approximately 1.8 per cent in 2008 and 2009.

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