Compare personal and secured loans
with one simple form

It has been claimed by one expert that interest rates in the UK could drop to below zero next year.

Michael Baxter, an economist at Defaqto, also believes that this will happen in other countries such as Japan and the US as the world struggles to cope with the current economic climate.

The interest rate in America is already at one per cent and Mr Baxter is of the opinion that what is currently happening in the states could be repeated in the UK in a year's time.

"I am not saying they will drop to zero but there has got to be a reasonable possibility of that happening," he said.

Mr Baxter added that predictions by central banks are often incorrect or lagging behind the current situation.

The Bank of England's Monetary Policy Committee cut interest rates to 4.5 per cent, a drop of 50 basis points, when it met at the beginning of the month.

Looking for a cheap loan? Fill in our short quote form and compare loans from a panel of lenders.