Local reaction to interest rate decision
Yesterday the Bank of England announced their plans to keep interest rates at 0.5%, a decision that came as no surprise to many in the region.
With little in the way of economic growth over the last quarter, this decision could indicate that the recovery many have lost some momentum. Commenting on the figures, Tony Sarginson of EEF the Manufacturer’s organisation said:
“As far as North East based manufacturers are concerned, there has been nothing since the Committee last met which would argue for a change in stance, so yet another vote to hold comes as no surprise.
“While the Bank’s next Inflation Report will be closely watched, it is unlikely we’ll hear any change in tack form the view that risks are anything but skewed to the downside.”
The weak outlook now means that the base rate of interest could stay at 0.5% for the rest of the year and potentially into next year as well.
However, John Mowbray, president of the North East Chamber of Commerce (NECC) sees the move as a positive one, which will provide businesses with greatly needed stability.
He said: “The economic turbulence, both in the UK and abroad, continues to be unsettling and while we are still experiencing growth here in the North East it is slower and more fragile than we would like.
“Any move to raise interest rates against this backdrop would not have helped.”