Member Article

Interest rates held at 0.5% for 24th consecutive month

The Bank of England’s Monetary Policy Committee has decided to hold interest rates at a record low of 0.5%.

It means there has been no change in the bank’s interest rates for two years.

The news comes despite the fact that inflation is currently twice the Bank’s target rate.

Martyn Pellew, president of the North East Chamber of Commerce (NECC), said: “We are fully supportive of the Bank of England’s decision to hold interest rates. We have seen inflationary pressures increase over recent weeks.

“However, there remains a need for the Bank to create conditions in which businesses feel confident enough to make decisions that will lead to genuine economic stability.”

Mr Pellew said that the region had received a welcome boost recently with the news that Teesside steel works would be reopening in addition to Hitachi coming to Newton Aycliffe.

However, he stated that this was not enough on its own and he remained sceptical about the regions economic future.

He added: “There have been predictions over recent days that growth throughout 2011 is now likely to happen at a slower rate than originally expected, so until we see signs of improvement, we believe rates should remain static.

“An increase at this time would create real uncertainty and businesses don’t need the added pressure that would bring. We welcome today’s decision.”

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