An interesting comment in the Independent today, in a story that kicks off with Marks & Spencers'
dreadful Christmas sales;

David Kern, economic adviser to the British Chambers of Commerce, said: "Given the threats to the banking system and to the smooth flow of credit, we believe waiting would be a mistake."

Now let's think this through from another perspective.

The interest rest rewards risk. You would naturally charge a sub-prime lender a higher rate than a prime lender; the difference is your reward for taking the risk.

There is vastly increased risk in the market. The threats to the banking system, sub prime fallout, and projected reductions in collateral (if property prices fall) are all increased risks. Never mind the possibility of recession.

So as a lender, why on earth would I be reducing rates? Wouldn't I rather be putting them up?

And indeed we have seen banks tending to cut the rates they pay savers while keeping their interest rates for mortgage lenders stable. On one level that's just another of the banks' ploys for grabbing money off the consumer - taking back what they've lost on unfair charging for overdrafts - but on another level, that's the banks recognising the risk and taking their own decisions about what risk/reward ratio they're willing to accept.

So - interest rates to go down? I'm not so sure.