HARD-PRESSED homeowners and struggling businesses should not hold out hope of a cut in UK interest rates tomorrow, one of the North’s top economists has warned.

Alan Bridle, head of economics and research at Bank of Ireland Northern Ireland believes it is unlikely the Bank of England will follow the European Central Bank’s lead and increase interest rates tomorrow at noon.

But he does not see any chance of a rate cut. Mr Bridle said: “The best case scenario for Northern Ireland businesses and households is that the official base rate remains on hold at the current 5 per cent for the remainder of 2008.”

He believes the recent wave of depressing economic data in the UK which revealed high profile profit warning and declines in mortgage approvals has created an “uncomfortable hiatus” for policy makers. But Mr Bridle said the inflation overshoot in the UK has taken an interest rate cut off the agenda.

“For many borrowers the deliberations of the Bank of England’s Monetary Policy Committee over official rates will seem almost an irrelevance.

“Credit conditions remain tight both in terms of supply and price with little sign of significant easing on the horizon,” he added.

The lack of movement on interest rates will do little to help the North’s struggling housing market according to estate agent Tom McClelland who is based in Co Down.

Mr McClelland who is the residential property spokesman for the Royal Institution of Chartered Surveyors in Northern Ireland said while a rate cut would stimulate the market, he also accepts concerns about rising inflation.

Mr McClelland says estate agencies across the North are under pressure in the current climate.

Many of the North’s larger estate agencies have been quietly laying off staff in what were previously key offices.

According to Mr McClelland the slowdown in the housing market has had a significant impact on the industry and he expects further jobs will be under threat and more branch offices will close if the market does not improve.