Member Article

NE employers ? 'rates rise will lead to job losses'

A third of North East firms fear they will be forced to lay off staff if interest rates continue to rise, according to a new survey. In addition, 77% of companies anticipate future investment plans will be threatened if the Bank of England’s rate-setting committee delivers another hike in rates this Thursday.

The figures, released today by the North East Chamber of Commerce, show that two out of every three businesses surveyed said they would have to push up prices if that was to happen. More than half of the companies also said they expected a significant decrease in sales in the wake of a rise.

Andrew Sugden, NECC director of membership and policy, said: “NECC warned last month that using interest rates as the sole method to manage inflation was akin to using a sledgehammer to crack a nut. Here we have evidence of the impact that any future increases will have. “It is totally wrong that the North East economy should pay the price for over-heating in the south as we need above average growth here to catch up with other regions. We have experienced substantial growth over recent years and the Bank must not let that trend be reversed.”

Alan Hall, Director of EEF Northern, the manufacturer’s organisation, said: “Given the strength of the currency and the prospects for inflation falling sharply in the coming months, companies will be looking to the Bank to move with caution.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .