LONDON (AFX) - UK economists appearing before the House of Common's Treasury Select Committee were at odds over the impact of the budget on prospects for interest rate cuts.
Confederation of British Industry economist Kate Barker said the Bank of England's Monetary Policy Committee would have scope to make "further small interest rate cuts this year" despite the expansionary nature of last Wednesday's budget.
But the Royal Bank of Scotland's Geoffrey Dicks said the budget easing in fiscal policy by 1.0 pct of GDP was not conducive to lower rates.
He said further rate cuts would be out of the question in the short term were it not for the U.S. downturn.
"That alone may allow the Bank of England to make further cuts. The Chancellor is not helping that outturn," he said.