Pressure mounted on the monetary policy committee to deliver a cut in interest rates today, after a clutch of weak data suggested the economy was slowing more abruptly than the Bank of England had hoped. Financial Times, The Times, Daily Telegraph
The purchasing managers’ index of services activity, which the Bank relies on to improve its estimates of economic growth, fell from 53.1 to 51.9 in November. This is its lowest level since May 2003, when interest rates were only 3.75%.
David Pretty, a leading figure in the housing industry and adviser to the Government, believes the Bank of England should make a series of interest rate cuts.
He wants a rate cut from the Bank today and another next year to improve the outlook for the housing market.
House prices fell by 1·1% in November — the largest monthly fall this year and the first time since 1995 that the figures had fallen three months in a row, according to Halifax, the country’s largest lender.
Senior economists and business groups urged the bank to make an immediate cut from 5·75% to 5·5%, amid a wealth of evidence that the economy was now slowing dramatically. Figures showed yesterday that the services sector, which represents three-quarters of Britain’s wealth, was close to stalling.