There is it seems only limited scope for further interest rate cuts from the UK. The rate at which cuts will be implemented is to slow down sharply towards the end of 2008.
Inflation though will be over the target of 2% as set by the government and there are thoughts that the rise could be as much as 3%.
The Monetary Policy Committee does not plan to cut rares as much as the markets had anticipated. We know that there is a fine balancing act which needs to take place between interest rate cuts and the rise of inflation.