Manufacturers warn on interest rates

The manufacturers’organisation EEF and the Manufacturing Technology Association (MTA) said that business understood the decision to keep rates on hold in order to rein in inflation. EEF Chief Economist, Steve Radley, said: “So long as inflation remains stubbornly high, the Bank will continue to face a tough choice. But mounting evidence of a stagnating economy means the case for further cuts is growing.” The MTA also called for an interest rate cut as soon as possible. External Affairs Manager Simon McVicker said; “With the OECD forecasting that the UK will slip into recession in 2008 and with other key forecasters hinting the same it now seems that the MPC should shift its focus to stimulating growth in the economy as a priority. This dictates a cut in interest rates in October. "We at MTA remain confident that overall the manufacturing technology sector will record growth of around five per cent in 2008. However, we are concerned that confidence could be severely hit going in to 2009 and without interest rate cuts our sector could see a cooling off next year.”