By the end of next year it is likely that interest rates will have fallen to at least one per cent, it has been claimed.
Defaqto believes that the current economic situation in the UK is similar to that which occurred in Japan in the 1990s and people have good reason to expect deflation.
Michael Baxter, economist at Defaqto, said: "It frequently occurs when [you] have crashing asset prices and house prices and equities are falling in tandem like they are at the moment."
He also mentioned the sale recently held by Marks and Spencer's which saw the company slash 20 per cent off their prices five weeks before Christmas.
Mr Baxter said this was "unprecedented" and it is likely that inflation will "fall and fall" until it enters negative numbers.
The last interest rate cut announcement saw the Bank of England Monetary Policy Committee reduce rates by 1.5 per cent to three per cent.
Looking for a cheap loan? Fill in our short quote form and compare loans from a panel of lenders. |
0 comments
