Base rate cut 'is not guaranteed'

Property owners should not assume that a cut in the base rate is on the way, according to a financial services provider.

Fair Investment Company is warning people that inflationary concerns may stop the Bank of England from implementing drops before the end of the year.

Close to 33 per cent of people believe the level will be at 4.75 per cent by the end of the year, while 27 per cent think it will be under 4.5 per cent, the firm added.

And this comes as the Financial Services Authority launches a guide advising people how best to avoid mortgage arrears.

People should be aware that the dramatic cuts in the interest rate seen in the US are not guaranteed in the UK, said Fair Investment Company director James Caldwell.

He said: "The monetary policy committee's decision is not as straightforward as people might think when it comes to setting the base rate. Inflation must be taken into consideration, as must the country's general economic condition."

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