Bank deputy hints at interest rate cut

Interest rates could be cut next month to counter the turmoil affecting markets, a Bank of England official said yesterday. Deputy Governor Rachel Lomax said she feared the financial crisis could trigger a fall in property prices. Despite voting for rates to remain at 5.75 per cent earlier this month, she said she would be willing to cut rates to combat the “credit crunch” caused by the collapse of the American mortgage market. Banks have been “hoarding” money rather than lending because they face major losses on portfolios of defaulting US mortgages, she said.
[Daily Mail page 8 - 23.11.07. Also reported in The Daily Telegraph page B5.]