Record low base rate forecasted

Two new polls of economists have revealed a consensus that the Bank of England will trim the base rate to its lowest since the institution was established in 1694.

A Reuters poll of 61 economists found that 41 believe there will be a reduction from two per cent to 1.5 per cent when the monetary policy committee (MPC) meets this week.

Of the remainder, 14 tipped a reduction of one per cent, four forecasted a 0.75 per cent cut and just two said the MPC will leave the rate on hold.

It also found a consensus of a base rate of 0.5 per cent by June.

Such moves could lead to cheaper mortgages, something that could be good news for first-time buyers.

The Reuters poll outcome matched that of a Bloomberg survey of 50 economists, which found the median prediction to be a trimming of the rate to 1.5 per cent.