Crisis 'Will Get a Great Deal Worse Before It Gets Better' - but Scope for Rate Cut

Summary

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THE weakening British economy should allow the Bank of England to cut interest rates later this year, according to an influential forecasting group.

Despite inflation remaining above the 1 per cent to 3 per cent target range, the Ernst & Young Item Club expects the Bank of England to cut the base rate from its current 5 per cent to 4 per cent by the end of next year.

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Crisis 'Will Get a Great Deal Worse Before It Gets Better' - but Scope for Rate Cut

But the club's summer forecast due out tomorrow comes amid a warning that the economy is in danger of being crushed between the jaws of world credit and commodity markets, "with litt...

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