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Economist predicts rate cut

Pressure is mounting on the Bank of England to cut interest rates next month, the Daily Mail reports.

The credit crunch is taking its toll on the housing market - with new figures from Nationwide showing an overall 0.6 per cent drop in UK property prices for March.

Normally, this would make a bank cut more likely - as a slowing housing sector has a major effect on the economy as a whole.

However, the Treasury has also released figures this week showing above-target inflation and stronger-than-expected future economic growth - both factors mitigating against a cut.

Talking to the newspaper, chief economist at Nationwide Fionnuala Earley said: "We think [that] the continued weakening in the housing market, will mean the [Bank] will bring forward its rate cut to April."

Cutting the base rate of interest, as well as encouraging more people to buy homes through making mortgages cheaper, could also have a positive effect on the affordability of secured loans, adverse credit loans and instant loans.

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