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Businesses welcome rate decision

Published On 7 June 2007 at 12:46:24

Business leaders have welcomed the Bank of England's decision not to increase interest rates again.

Earlier today (June 7th), the Bank's Monetary Policy Committee (MPC) revealed that interest rates would remain at 5.5 per cent this month, after previous increases appeared to have begun to bring inflation under control.

The MPC has already increased rates four times since August last year, but figures from the Office for National Statistics (ONS), released in May, showed that inflation was beginning to fall.

Commenting on today's decision, Ian McCafferty, the Confederation of British Industry's (CBI) chief economic advisor, said: "By leaving rates on hold this month, the Bank has resisted rushing into a rate rise that, though widely expected, may still prove unnecessary.

"Despite recent data showing selling prices rising more rapidly across a number of sectors, evidence is starting to emerge that the four rate rises since August are having an impact.

"Signs of slowing retail sales growth and softening housing market growth suggest demand is starting to ease. As a result, the recent ability of companies to push up prices is unlikely to continue."

However, many experts are already predicting that a further rise in interest rates before the end of the summer is "inevitable".

 

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