Member Article

Interest rates cut: North East business reaction

Following the Bank of England’s announcement to cut interest rates to 0.25%, we’ve spoken to enterprise leaders from around the region to hear what the decision means for the economy.

North East reaction

Richard Lane, co-founder of sales outsourcing, training and recruitment company, durhamlane

“The decision to cut interest rates marks a dark day for the UK economy, demonstrating to the global market that Britain has lost confidence in itself.

“This will, undoubtedly have a negative impact on sales in the UK and international markets, where confidence, built on knowledge, experience and understanding, is key to success.”

Nigel Mills, North East Entrepreneurs’ Forum Chairman

“The decision to cut interest rates is deeply concerning at a time when we need to prioritise stability until we have further economic and employment statistics.

“We need solid data on the economic effects of the EU referendum result before making any minor changes to interest rates.”

Sean Bullick, Chief Executive of Business Improvement District Company (BID) NE1 Ltd

“The cut in interest rates is great news for business, for the economy and for consumers. There’s a huge amount of investment in the North East already taking place.

“Property developers are building, businesses are launching and expanding, and new bars and restaurants are opening.

“This cut makes further investment a more attractive prospect for firms as well as providing a boost to the city centre’s retailers and venues as consumers with more cash in their pocket each month feel more confident about spending it.”

John Elliott, Chairman of Ebac

“The biggest problem with the UK is not being addressed. The solution needs structural change or things will stay as they are. We need surgery not pain killers. The fundamental problem is that we consume more than we produce. It’s that simple.

“Everyone agrees that it’s not sustainable and then delivers pain killers and buries their heads. We don’t feel the pain but the problem isn’t being solved in fact it’s growing.

“We reduce the pain by printing money, having low interest rates and selling our assets. If our situation was that we were suppling more than we consume it would be a totally different story. We would be free to either consume more or work less.

“With a change of focus, we can easily do this. If we focused on increasing supply rather than increasing demand we’d all be better off in real terms. In fact increasing demand makes things worse in the longer term.

“The easiest way to get our finances into balance is to manufacture things that we currently import. This will not happen without government intervention. With free movements of goods and capital big business will move to maximise their profits regardless to the costs to individual countries.

“When a company moves production to a lower cost economy it makes more profit by reducing its costs. However, the country that lost the manufacturing still has the costs of the people who lost their jobs but without the output from the factory.

“This loss being made up by increasing imports. If the UK was a household we would be spending more than we earn. So what’s the solution? Invest in infrastructure, build a conservatory.”

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →