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Bank tipped to make 0.25% cut to base rate

Analysts are tipping the Bank of England's monetary policy committee (MPC) to cut interest rates this week, amid signs of an economic downturn. The MPC is expected to trim rates by 0.25 per cent, bringing the key base rate of interest to five per cent. Factors informing the decision are thought to include signs that the housing market is softening - as born out by a study from the Halifax yesterday which showed that house prices slumped 2.5 per cent during February. Indications that retail spending is moderating are also expected to influence the MPC. Richard Lambert, director of the Confederation of British Industry, said: "Despite the MPC's attempts to loosen monetary policy through two recent interest rate cuts, the credit crunch is pushing interbank and mortgage lending rates up, which is constraining economic activity and demand. "The Bank should make a quarter point cut now, rather than later, to help hard-pressed businesses and consumers."The Bank has cut interest on two occasions since December.

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