Interest rates held at 5%
Jul 11 2008
Interest rates held at 5%
The Bank of England, in the face of both rising inflation and a weak economy, has chosen to maintain interest rates at five per cent.
Reacting to the decision, David Kern, British Chambers of Commerce (BCC) economic adviser, says the move was 'almost universally expected'.
He explains that the BCC is very concerned about inflation but thinks that the weak economy should be the priority.
As such, the BCC would like to see an interest rate cut to help counter the risk of recession and improve confidence among both consumers and business owners.
Hikes in oil and food prices will mean that short-term inflation is inevitable, he says, adding 'it would be a serious mistake to try and deal with this by clobbering the economy with higher interest rates.'
The Royal Institution of Chartered Surveyors also believes that an 'easing of policy' may be important because of low business and consumer confidence.
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