Poll predicts April interest rate reduction

A majority of financial institutions have predicted a fall in interest rates when the Bank of England's monetary policy committee (MPC) announces its interest rate decision this month.

Conducted by Adfero, the poll has found that out of a total of eight participants, six believe that the MPC will reduce interest rates when it announces its decision on April 10th, which may impact upon the ability of small to medium-sized enterprises to take on more staff.

A majority of the institutions polled expect interest rates to be reduced by 0.25 per cent, although HSBC and Lloyds TSB believe that interest rates will remain on hold.

"The data suggests that interest rates are likely to be cut in coming months. It's just a close call between whether that's done in April or May," said Jeavon Lolay, a senior economist at Lloyds TSB.

"With May we just feel it's slightly more favourable, because it's timed with the Bank of England's latest inflation report."

Among the other participants of the poll were Barclays Capital, Nationwide and the Centre for Economic and Business Research.