Member Article

Interest rates remain at 0.5% for 25th consecutive month

The Bank of England’s Monetary Policy Committee yesterday announced that it was holding UK interest rates once more at a record low of 0.5%.

There has been no change to the Bank rate for 25 months, despite the fact that inflation is currently more than twice the Bank’s 2% target rate.

No new quantitative easing measures were unveiled.

However one of the region’s manufacturers has questioned the banks decision saying he would have supported a rise in interest rates.

Geoff Turnbull, chairman of North East-based GT Group, said: “Inflation is the enemy to all sectors and a rise in interest rates is the only control we have available to rein in inflation.

“I do not believe an interest rate rise would damage the pound or have an adverse effect on the competitiveness of British industry. “Without an interest rate rise, we run the risk of runaway inflation and it is essential that inflation is brought under control.

Last month, three MPC members again voted for a rise, and it was revealed that consumer prices inflation rose again in February, to 4.4%.

The North East Chamber of Commerce stated that they believe any move to increase interest rates would have been too early.

Martyn Pellew, president of the North East Chamber of Commerce (NECC), said: “Businesses are reporting that their two most pressing concerns in the coming months are inflation and interest rates.

“On balance, it would appear that any move to increase rates would be premature, and could reduce disposable incomes of families and businesses alike while possibly increasing the value of sterling and therefore placing undue pressure on our growth creating exporters.”

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