Member Article

Six months on the trot for 0.5%

The Bank of England has held interest rates at the record low of 0.5% for the sixth consecutive month.

It has also said it would continue to pump up to £175bn into the economy through the ‘quantitative easing’ programme.

Sarah Green, Regional Director, CBI North East, said: “It is not surprising that the Bank has chosen to keep things as they are, given the big decision on quantitative easing taken last month. The statement from the MPC today tells us relatively little, though the minutes released later this month should be more revealing.

“They may give an insight into the extent to which quantitative easing is having an impact, and whether the Bank feels that its measures, which help the commercial banks, are also feeding through to the wider economy.”

Martyn Pellew, president of the North East Chamber of Commerce (NECC), said: “News that business lending fell by the largest amount on record in July is proof that quantitative easing is not yet having the full desired effect.

“However levels of debt are starting to fall which is good news given the enormous debts accrued in the UK during the past decade. Today’s decision reflects the unprecedented level of stimulus that has already been injected into the UK economy.

“We hope the measures already taken will continue to have a marked positive effect on the economy as we begin to emerge from recession.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .