Rate cut `likely` after US "shock"

The recent "shock" interest rate cut in the US is likely to be followed by similar action in the UK next month, a financial expert has claimed.

Earlier this week, the US Federal Reserve cut interest rates by 0.75 per cent to 3.5 per cent, one of the biggest cuts for decades.

As a result, a number of analysis have suggested that the Bank of England`s monetary policy committee will follow the lead and cut interest rates in the UK by 0.25 per cent when they meet next month.

Fool.co.uk`s head of personal finance David Kuo said: "[Bank of England governor Mervyn King] said that inflation is a problem and that is something most people do recognise.

"So the cuts in interest rates in February may not be as dramatic as the one in US but we will get the quarter point cut in February."