Market forecasts steep UK slowdown resulting in rate cut

London

PRELIMINARY surveys indicating that the UK economy is slowing down sharply point to a cut in interest rates and possible quantitative easing (QE) next week, predict economists and market participants.

As a result, sterling weakened against the US dollar and euro and 10-year gilt (government bond) yields tumbled to a multi- year low of only 0.72 per cent, compared with 1.93 per cent a year ago.

UK consumer confidence slumped this month to its lowest level in three years, ac…