BoE May Cut Interest Rates Again

By John Fraher  |   2008-11-13  |     NEWSPAPER EDITION

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BANK of England Governor Mervyn King said policy makers are prepared to cut interest rates again to prevent a recession pushing inflation below its target.

"We are certainly prepared to cut bank rate if that proves to be necessary to hit the central bank's 2 percent inflation target," said King in London.

Inflation will fall "well below" the bank's goal from the middle of 2009 and gross domestic product will contract by an annual 1.8 percent in the first three months of the year, forecasts by the Bank of England released yesterday in London show. The predictions are based on market expectations of the interest rate just above the current 3 percent in the next quarter. The pound fell to a low against the euro after the report was released.

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