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CEBR says base rate stable at 0.5% until 2012

Following the emergency budget today, the centre for economics and business research predicts that interest rates will remain stable at 0.5% until the end of 2012.

Douglas McWIlliams, chief executive of cebr, says: “The chancellor noted Mervyn King’s remark at the Mansion House dinner last week that if growth was slower interest rates would be lower.

“We agree and – with our lower growth forecast we now think that base rates will be stable at 0.5% until the end of 2012 and the 10 year bond yield will fall to 3%. With base rates lower for longer, we also expect mortgage rates to fall from around 4% at present to 3% by early next year.”

He says unlike Gordon Brown, it appears that the main bad news was in the speech rather than being hidden in the small print, though a range of reviews announced in the budget may contain more tough decisions.

He adds: “We are much more bearish about the economy than the Office for Budget Responsibility and expect growth in the next three years to average 1% rather than their 2%.

“So we see the tough decisions in the Budget as putting the recovery more at risk. But even we do not see a double dip recession – though we see little growth in consumer spending in the next two years and think that it will be 2013 before we start to see a sustained export and investment boom.”


Court order puts claims company into liquidation

Cartel Client Review was placed into compulsory liquidation at the Royal Courts of Justice last week. The move came after a winding-up order was made by HM Revenue & Customs against the claims management firm for an undisclosed sum. The Ministry of Justice suspended the authorisation of Cartel Client Review in March and the Solicitors […]


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