UK Economics

UK Economics Focus

10 May, 2001

Forecast change: 4.5% interest rates by year-end

Clients of Capital Economics will know that we have been well ahead of consensus forecasts in
predicting lower official interest rates in the UK this year. We first forecast that the Bank of England’s
repo rate would drop to 5% by end-2001 back in January, at which time consensus forecasts were
for three-month rates at year-end of close to 6% (implying a repo rate of about the same level).

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