November 5, 2001	Monday	haba’an 18, 1422

BRITAIN’S central bank is tipped to deliver its seventh interest rate cut of the year next week as signs emerge that previously buoyant consumer spending is on the wane because of mounting concern over job security.

British interest rates are currently at a 37-year low of 4.5 per cent but are still the highest of any main industrialised nation because of the resilience of the economy.

But a deteriorating international picture has been joined in recent weeks by growing signs that the most buoyant area of the domestic economy, consumer demand, has taken a hit since the September 11 attacks on the United States.

And a series of comments by members of the Bank of England’s nine-member Monetary Policy Committee suggest there is support for further rate cuts should the need arise.

BoE Governor Sir Edward George said last month that the MPC would “not hesitate to ease monetary policy further” if signs emerged that the overall economy was weakening unnecessarily.

Of 29 economists polled by Reuters earlier this week, 24 said the MPC would trim rates by a quarter point to 4.25 per cent on Thursday. One economist predicted rates would be slashed to 4.0 per cent and four said they would be left unchanged.

The MPC, which voted unanimously to make two quarter point rate cuts in the wake of the September 11, attacks will announce its rate decision at 1200 GMT on Thursday.

The following are some of the factors it is likely to consider during the two-day meeting:

Data from the key source of global economic weakness — the United States — have continued to make grim reading. The economy recorded its steepest fall for over a decade in the third quarter and unemployment is at its highest for 18 years. With Japan also on the brink of recession and Europe increasingly succumbing to the global slowdown, the MPC will probably take the view that the international economic outlook has worsened since it last met in early October.—Reuters