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Hopes up for U.K. rate cut
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October 21, 1998: 7:34 a.m. ET
Committee minutes and weak retail data favor British rate cut soon
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LONDON (CNNfn) - The likelihood of a cut in U.K. interest rates increased as the Bank of England released more information on its latest deliberations.
Weak retail sales data released Wednesday also favored a rate cut.
The minutes of the Bank's Monetary Policy Committee's last meeting were released Wednesday, indicating that the committee members unanimously favored a rate cut.
"There is a greater tendency toward lower rates," said Tim Fox, treasury economist at Standard Chartered bank in London.
At the meeting on October 8 the committee, which sets interest rates independently of the U.K. government, decided to reduce the repo rate by a quarter point to 7.25 percent.
Two members of the MPC, Willem Buiter and DeAnne Julius, voted to cut rates by more than a quarter point.
News that the whole committee wanted lower borrowing costs has increased speculation that the next rate cut may not be far away.
The MPC is next scheduled to meet November 4 and 5, but it can cut rates at any time.
Standard Chartered's Fox expects a cut in November, and possibly another one in December.
The British pound sterling dropped against other currencies when the minutes were published, and the FTSE 100 index staged a short-lived rally into positive territory after earlier slipping into negative territory.
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