Pressure on for interest rate cut

By FWi staff

BANK of England officials gathering in London today (Wednesday) face mounting pressure to reduce interest rates.

The Banks Monetary Policy Committee monthly meeting takes place hours after Chancellor Gordon Brown slashed his growth forecasts for Britains economy.

The Chancellor reduced his growth forecast from 2.5% to 1% yesterday evening. Analysts said the move would intensify calls for interest rate cuts to boost the economy.

Many saw the reduced growth forecast as an indication that interest rates should be reduced by half a percentage point from 7.5% to 7%.

A reduction in interest rates would weaken the strong Pound, which has been blamed by farm leaders for exacerbating the crisis in agriculture.

The strong Pound has sucked in cheap imports of meat and other agricultural products, making it difficult for UK farmers to compete.

An announcement on interest rates will be made mid-day tomorrow (Thursday).