Regional reaction to Interest Rates Decision
The Bank of England will continue to keep interest rates at a record low of 0.5% it has been announced.
Trepidation over the strength of economic recovery had lead economists to expect such a decision from the Monetary Policy Committee.
Rates have remained low since March 2009 amid fears that the UK could be facing a double-dip recession.
Despite this, the Bank have stated they will not be increasing their £200bn quantitative easing programme.
Commenting on the decision, John Mowbray, president of the North East Chamber of Commerce said: “It’s in the best interests of economic stability to keep interest rates at this record low level
“These are unsettling times and while there is growth in the North East, it is at a slow rate.
“Keeping interest rates low provides the stability which is vital for the economic recovery to continue.”
According to Bank figures, savers have missed out on £43bn due to the low rates, while mortgage borrowers have benefited, paying £51bn less in monthly interest.
Graeme Leach, Chief Economist at the Institute of Directors expected the quantitative easing programme to be increase before the end of the year.
He said: “The continuing eurozone crisis, deteriorating consumer and business confidence and the weakness of the money supply mean that we are sailing close to a double-dip.
“The downside risks are considerable and for this reason the IoD is calling for an initial £50bn expansion in quantitative easing.”
Further research by the National Institute of Economic and Social Research indicated the rate of growth in the UK economy slowed to 0.2% in the period from June to August.