Chances of further interest rates ‘Slim’

The bank of England has hinted that further interest rate cuts are ’slim’. The Bank of England says the room for further rate cuts is limited as it predicts slower growth and rising inflation.

That could mean fewer interest rate cuts than financial markets expect.

Governor Mervyn King said that “it is the outlook for inflation, in the medium term” that the central bank’s Monetary Policy Committee (MPC) will remain focused on.

Mr King said it was likely that the rate of inflation would hit 3% by the middle of this year, which would require him to write a letter of explanation to the government.

The comments come amid increasing signs that problems in global financial markets, a strong pound, and earlier increases in the interest rates are creating problems for the UK economy.

The Bank cut UK interest rates last week to 5.25% from 5.5% in an attempt to prevent a major slowdown in the economy.

bank of england cut interest rate

The Bank of England’s rate-setting committee has cut interest rates to 5.25% from 5.5% amid signs that the UK economy is slowing down. Analysts had widely predicted the move, which followed recent cuts in the US, where the Federal Reserve has slashed its borrowing costs to 3% from 4.25%. However, the Bank of England signalled it was unlikely to be as aggressive because of fears over rising prices. The Bank said it needed to ensure that growth and inflation were balanced.