Interest rate cuts 'unlikely'

Huddersfield Daily Examiner (Huddersfield, England), July 10, 2008

HOMEOWNERS and businesses hoping for an interest rate cut as are unlikely to gain any cheer from Bank of England policymakers today.

Fears over rising inflation mean the Bank's Monetary Policy Committee (MPC) is likely to leave borrowing costs unchanged at 5% for a third month.

The "hold" decision comes despite a fresh blizzard of dire news from the housing market, stock market uncertainty and business leaders warning of a "serious risk" of recession this week.

The British Chambers of Commerce's (BCC) forecast comes as the UK's biggest house builders shed almost 5,000 jobs amid plummeting sales as mortgages availability is hit by the credit crunch. But soaring oil, food and energy prices have pushed inflation more than 1% above the MPC's 2% target to 3.3%- and it is expected to top 4% later this year.