The Royal Institution of Chartered Surveyors (RICS) has said it feels disillusioned by the Bank of England's decision to keep interest rates on hold at five per cent.

The organisation's chief economist Simon Rubinsohn said a quarter point cut to 4.5 per cent should be announced next month if there is no improvement in economic data and both consumer confidence and housing market activity remain subdued.

Analysts say concern over rising inflation - with food and oil prices both on the increase - is preventing the Bank of England from making large cuts in base rates.

But according to Mr Rubinsohn whilst the risks associated with higher inflation should be recognised, the apparent downturn in economic activity should be a bigger concern at the moment.

"Housing transactions have collapsed, consumer confidence has sunk to its lowest level since 1992, the service sector appears close to stagnation according to the latest CIPS survey and the retail sector is under immense pressure," he pointed out.

RICS believe further rate cuts would provide a boost to the economy and the housing market, but there is scepticism over whether they would be passed on to consumers.

People struggling with high interest rates on their mortgages and other debts may benefit from a personal loan to pay off existing balances and get back on track financially.
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