The Royal Bank of Scotland (RBS) has given some hope to those looking to buy a house in Scotland by indicating that the base rate of interest could be cut to 4.5 per cent in the first quarter of next year.
Ross Walker, RBS’ global economist, suggested that over the next year the bank is expecting a total of three quarter-per cent interest cuts by the Bank of England’s monetary policy committee (MPC).
This could be good news for anyone considering whether to buy a house in Scotland, as it would lower the cost of borrowing.
After what RBS expects to be a 0.25 per cent cut at this month’s MPC meeting, Mr Walker outlined how he sees the next 12 months shaping up.
"We expect a further quarter-point cut to follow in the summer … before the expected peak in CPI inflation this autumn induces a hiatus ahead of a final 25bp [basis point] reduction to 4.5 per cent in Q1 2009," he said.
The next MPC decision will be announced on April 10th.