DHAKA: The Bank of England could make the first cut to UK interest rates in more than seven years on Thursday.

Mark Carney, the Bank governor, has indicated that the Monetary Policy Committee (MPC) would vote to cut rates in July or August, reports the BBC.

The probable reduction from 0.5% to 0.25% is intended to boost the UK economy in the wake of the Brexit vote.

Although a cut is not certain, financial markets put the probability at about 80%.

Ben Brettell, senior economist at Hargreaves Lansdown, said, ‘Initially August had looked more likely, but with economic data deteriorating and markets still nervous, it now looks probable the MPC will adjudge that immediate action is warranted’.

Surveys for both the services sector and the construction industry have pointed to a sharp slowdown, with the latter recording its worst month in seven years for June.

However, Joshua Mahony, market analyst at IG, said the lack of economic data since the referendum could prompt the Bank to hold fire, ‘There is a significant possibility that Mark Carney will disappoint by postponing a rate cut until the August meeting’.

BDST: 1331 HRS, JUL 14, 2016
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