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UK may have to cut interest rates

Interest rates in the UK may have to be cut to stimulate economic growth, according to a new report.In its latest report on economic conditions in the UK, the Organisation for Economic Cooperation Development (OECD) claims that because of continuing upheaval in the financial markets could lead to economic slowdown in the future.The OECD had previously predicted growth of 2.5 per cent for the UK economy in 2008, but the organization has now warned that "although indicators of economic activity have been robust in 2007 to date, there is now a risk that growth will be weaker going forward, which could imply a need for interest rate reductions".The UK's housing market could be particularly at risk from recent economic developments, the OECD said: "Looking ahead the interest rate increases over the last year, together with recent financial market volatility, are expected to slow the housing market."Speculation has also grown that the Bank of England could well decide to cut UK interest rates to help prevent a wider impact of the global credit crisis on the economy.

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