Manufacturers welcome full point cut in interest rates
1 min read
Amidst continued deteriorating conditions for the UK economy, Britain’s manufacturers have welcomed the Bank of England Monetary Policy Committee’s decision today (4 December) to reduce interest rates to their lowest point since 1951.
Commentingon the decision to cut the rate by 1% to a 57-year low of 2%, Steve Radley, chief economist at the manufacturers’ organisation EEF said: “The Bank has to pull out all the stops to prevent the recession from deepening. It is now essential that government steps up to the plate with targeted measures to support business and get high street banks to start lending again.”
His counterpart at the CBI, chief economic adviser Ian McCafferty said the economy needed a significant monetary stimulus and the Bank had clearly decided this would be best achieved by another big cut in interest rates. “What is critical for business and consumers alike is that this reduction is passed on,” he said.
“The economy is stalling, inflation is expected to undershoot the Bank’s own target and the headline RPI rate of inflation is likely to turn negative for at least a few months in 2009. We need to see lending improve and to keep business working.”
