1% base rate cut most likely

When the Bank of England's Monetary Policy Committee (MPC) announces its base rate decision tomorrow, anyone looking for a loan or mortgage will probably be watching.

After last month's surprise cut of 1.5%, economists are expecting something substantial this time. Nationwide Building Society, for example, thinks a cut of 1% is the most likely outcome.

Nationwide's 'MPC forecast probability of base rate change' sees a 15% chance of a 0.5% cut; a 15% chance of a 0.75% cut; a 60% chance of a 1% cut - and a 10% chance of a cut of more than 1%.

According to Reuters: 'Given the grim outlook for United Kingdom, analysts are expecting another big rollback in interest rates from the Bank of England after a hefty one-and-a-half percentage point cut on Nov. 6, sending benchmark rates there down to 3.00 percent.'

Whatever the decision, it won't necessarily affect the cost of loans and mortgages (except trackers) but a lower base rate would make it easier for loan providers to offer cheaper deals.

Tags: base rate, loans, loan, mortgage, tracker mortgage, mortgages

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