The base rate of interest could fall to as low as four per cent, according to a UK economist.

Paul Dales from Capital Economics said that numerous cuts will see the interest rate gradual fall to reach the four per cent level from the 5.25 per cent it currently stands at.

"We think that [the monetary policy committee will] only continue to cut rates slowly, which obviously means there will be less of a stimulus to the economy, which we think will mean that interest rates will have to go lower than otherwise," Mr Dales said.

This predicted fall in the rate of interest would mean that consumer credit and borrowing would be cheaper on the whole.

Mr Dales also dismissed the likelihood of a large cut in the interest rated when the monetary policy committee (MPC) meets next month, suggesting to mirror the US's Federal Reserve in this way would mean rates could only fall to around the 4.5 per cent level.

March's meeting of the MPC will take place on March 6th. February's meeting saw the MPC cut the rate of interest by 0.25 per cent, after maintaining the rate at 5.5 per cent in January.ADNFCR-1287-ID-18484548-ADNFCR

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