The Monetary Policy Committee will cut interest rates in August to protect the UK economy from sliding into a recession according to Bank of America Merrill Lynch (BAML) and Goldman Sachs.
BAML predicted interest rates being reduced from 0.50% to 0% next month, while Goldman Sachs expected a 0.25% cut.
Robert Wood and Gilles Moec, BAML's chief UK economist and chief European economist, wrote: “We expect the Bank of England to follow the financial crisis template: make liquidity easily available, ignore the one-off inflation shock from sterling and ease policy.
“We expect for them to cut interest rates 50bp at their July 14 policy meeting. We also expect the BoE to relaunch quantitative easing with a £50bn salvo. We pencil that in for August.”
They added: "We do not believe the UK government will embark on the all-out austerity drive sketched out by Chancellor Osborne last week."
Other economists agreed that a rate cut and more QE is on the horizon.
A Capital Economics statement read: “We think that a cut in interest rates in the near term looks likely and possibly even a restarting of the Bank of England’s quantitative easing programme.”
And this morning Council of Mortgage Lenders economist Mohammad Jamei said: “There is a possibility of a rate cut over the next few months if the economy falters as a result of post-referendum uncertainty.
“The bank is likely to have a balancing act on its hands over the near term, as it potentially faces a trade-off between stabilising inflation on the one hand, and output and unemployment on the other.”
However Alan Clarke, UK and Eurozone economist at ScotiaBank, disagreed that a rate cut is imminent.
He said: “Given hints that the MPC is reluctant to cut Bank Rate below zero; the Bank has just 50bp of rate cuts at its disposal.
“That ammunition is most likely to be held in reserve until a policy response is most justified.
“Notwithstanding that the MPC should be forward looking, we presume that it would prefer to use its remaining bullets only once the key economic data begin to deteriorate.”
This morning Barclays and RBS suspended trading after shares plummeted by 10.3% and 15%.
The pound fell to a 31 year low after the UK voted to leave the European Union.
