The Bank of England will trim base rate to 5% next week, according to a majority of economists in a poll by news agency Reuters. 

It has been at a 16-year high of 5.25% since last August and the Bank of England next meets to consider a change on Thursday next week. 

Over 80% of economists polled – 49 out of 60 – believed there would be a cut to 5%

“We look for a 25 basis point rate cut at next week’s meeting, although the call appears much closer than it did several weeks back. The case for lower rates is far from clear. If rates are lowered in August, it looks likely to happen on a close 5-4 vote” suggests one economist, Allan Monks at JP Morgan.

In June the Bank of England vote to maintain the 5.25% level was 7-2; in recent weeks many lenders have dropped their mortgage rates in line with swap rates and in anticipation of a cut by the BoE.

Meanwhile a new report claims that rising mortgage rates have pushed around 320,000 people into poverty, almost 100,000 more than suggested by official statistics.

The report from the Institute for Fiscal Studies, funded by the Joseph Rowntree Foundation charity, showed the rise in borrowing costs had hurt more people than widely assumed because of limitations in official household income data, which applies a single average interest rate to all households.

“This has led to the headline statistics understating the number of people in poverty, something set to get worse in next year’s data. Poverty rises have also been understated due to the unequal impact of inflation” says Sam Ray-Chaudhuri, research economist at the IFS.