Manufacturers welcome interest rate cut

Responding to the Bank of England Monetary Policy Committee's decision to reduce the bank rate to five per cent, the manufacturers organisation EEF said the Bank "must be ready to tear up script". EEF believes that despite the sector's continued resilience, the risks to the wider economy are increasing. Tighter credit conditions, falling house prices and weakening global growth now posed significant threats to business investment and consumer spending, it said. EEF chairman, Martin Temple, said that so far the Bank's gradual approach to cutting rates has been the right one. "However," he continued, "we are now dangerously close to creating a climate of fear which could talk ourselves into recession. The Bank must be ready to tear up the current script and take more decisive action to protect business and consumer confidence."