Manufacturers call for interest rate cut
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Britain’s manufacturers have called on the Bank of England to cut interest rates by a further full point this week in response to a wide range of data indicating the recession is gathering pace. Such a cut would see rates fall from 2% to an unprecedented 1%.
Steve Radley, chief economist at the manufacturers’ organisation EEF said: “This year was already going to be a serious challenge for manufacturers but all the indications are that the downturn is gathering pace at home and abroad. Every available opportunity has to be taken to try to prevent the recession deepening and that has to include another decisive cut in interest rates this week.”
And as the Bank of England’s Monetary Policy Committee (MPC) begins its first two day monthly meeting of 2009 the Chartered Institute of Personnel and Development (CIPD) also called for a full percentage point reduction “to help limit the scale of private sector job cuts in the coming year”.
Dr John Philpott, the CIPD’s chief economist, said: “The toll of private sector jobs losses is rising by the day. The labour market needs a further substantial cut in Bank rate allied to efforts to increase the flow of credit to hard pressed businesses. This is as important in the fight against rising unemployment as the government’s welcome initiative to create 100,000 extra jobs.”
