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By Peter Stevenson MEMBERS of Volunteer Doctors Cyprus have treated around 350 people at their free clinic in Nicosia since it opened three months ago, while two more, one in Paphos and one in Polis are due to open today. Limassol also has a free clinic, which was opened only last month, and plans have been drawn ...
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SOME 10 days ago, foreign minister Ioannis Kasoulides raised expectations by announcing the possibility of a deal with Turkey for the opening of the fenced off area of Famagusta, for the return of its inhabitants. In exchange the Cyprus government would agree to the opening of Tymbou airport to direct flights. ...
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By George Psyllides PRIVATE auditors have expressed doubt the electricity authority (EAC) could be considered a going concern and have asked its board to draft a credible plan to tackle the problem, according to the auditor-general’s 2012 report on the semi-state company. Among other issues, ...
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Cyprus Internet Directory [ Bank of England expected to cut rates to 5% ]

Bank of England expected to cut rates to 5%

The Bank of England looks set to cut interest rates on Thursday for the third time since December to shore up the economy in the face of the global credit squeeze.

The Bank's decision is far from a done deal, however.

Inflation has been above target since October and is likely to rise even higher soon, as a weaker pound and higher food and commodity prices work their way through the system.

Still, most analysts think the BoE will not sit on its hands with the weight of surveys pointing to slowing growth, falling consumer confidence and a sharp reversal in the housing market.

"Concerns about growth should trump inflation worries," said Andrew Smith, chief economist at KPMG.

A Reuters poll last week showed 48 of 63 economists predicting a quarter-point cut to 5% at the conclusion of its meeting at midday. The remaining 15 predict a cut in May.

The desire among commercial banks to hoard cash rather than lend means little, if any, of the two rate cuts since December has been passed on to consumers and businesses.

Mortgage rates for many borrowers have actually risen and the Bank's own credit conditions survey last week warned the situation could get worse.

"News of tightening credit conditions is increasing the downside risks to growth," said Alan Monks, an economist at J.P. Morgan.




British consumer morale has already taken a dive and could fall further if the downturn in the property market gathers pace.

The Halifax, Britain's biggest mortgage lender, revealed house prices fell 2.5% in March, the biggest monthly fall since 1992, when the country was in the grip of recession. "Mortgage lenders are very short of funds and have been tightening their loan criteria and pushing up their lending rate despite the recent reductions in base rates," said Andrew Smith, chief economist at KPMG. "On this assessment, base rates should be reduced again this month." The International Monetary Fund forecast this week that Britain's economy would grow by just 1.6% this year -- its weakest rate in more than a decade and significantly weaker than the government's own forecasts.

So far, Britain's economy appears to be slowing relatively gently. Retail sales figures have been surprisingly strong, manufacturing has recovered, and employment is holding near a record high.

The bigger worry is what happens next.

Policymaker Paul Tucker cautioned last week against attaching too much weight to backward-looking economic indicators.

"The picture on the real economy is mixed," he said. "What is clear is that credit conditions are unambiguously tighter than two months ago."

(Source: Financial Mirror)

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