The chief economist at the Royal Institution of Chartered Surveyors has said that the Bank of England's upcoming base rate decision is 'not terribly important now'.
A further change to the Bank of England's base rate will not have much of a bearing on the economy, it has been claimed.
According to Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, the Bank's Monetary Policy Committee's decision - due on March 5th - is "not terribly important now". The rate has reached an all-time low of one percent and many analysts predict that it will go lower still.
The Bank uses the rate to control inflation in the economy and its value affects commercial lenders' own interest rates when they offer mortgages and other financial products. Since October, the rate has been consistently lower as the Bank attempts to, among other things, boost the property market by making mortgages cheaper.
Mr Rubinsohn said that the rate may come down to support "quantitative easing" - the modern-day equivalent of printing money. "There is an argument that you might need to do that because otherwise you will have a dislocation between money market rates, which will be flooded by cash, and the base rate," he said.
However, he added that the base rate is "not really doing a lot" currently. "Technically they could cut it further but they may want to concentrate their energies and begin to embark on quantitative easing."
