King hints at interest rate cuts

Mervyn King, the Bank of England governor, has hinted that interest rates will be cut again in the near future as economic conditions continue to get tougher.

While acknowledging that cuts could happen in the future, Mr King also denied that there would be aggressive cuts as have been carried out by the US Federal Reserve.

Howard Archer, of economic forecasting consultancy Global Insight, said: "We now expect the Bank of England to trim interest rates by a further 25 basis points to five per cent in April, rather than in May as we had previously forecast."

He added that further out, the Bank of England expects interest rates to fall to 4.5 per cent by the end of the year and to "four per cent in the first half of 2009".

Last month the Monetary Policy Committee voted to keep interest rates the same following cuts in February and December.

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