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NAEA calls for rate cut

The base interest rate must be reduced by the Bank of England this week, the National Association of Estate Agents (NAEA) said yesterday.

On Thursday, the bank's Monetary Policy Committee will decide on whether or not to cut the current rate of 5.25 per cent.

The apparently slowing economy has led to cooling in the housing market - with prices not growing as rapidly as before, or, in some cases, even falling.

A reduction to the rate could also lower mortgage and personal loans rates, making repayments cheaper and providing an impetus for overall growth.

Commenting, chief executive at the NAEA Peter Bolton King said: "There is an ongoing lack of confidence in the housing market and the Bank of England needs to act fast to stop it stalling.

"The situation is by no means dire but the result could be very different if the Bank of England does not act now."

A recent interest rate poll, which quizzed eight top economists, found unanimous agreement that the rate would remain at 5.25 per cent this month.

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