Demand For Further Rate Cuts
Following the Monetary Policy Committee's meeting last Thursday, the Bank of England cut interest rates from 5.5% to 5.25%. However, despite the good news of last week's cut, many business leaders are calling out for further reductions.
The big question now looming is whether or not the Bank of England has cut rates far enough.
According to the British Chamber of Commerce, we can expect to see economic growth fall to 1.7% over the course of the year. This forecast estimates a much lower inflation figure than those predicted by both the City and Treasury. David Kern, an economic adviser at the BCC, said in a statement, "Threats to growth are much more acute now than risks of higher inflation and we would have welcomed a bold UK move to 5%."
Although the Bank of England has stated that it must balance economic growth with inflation, the British Chamber of Commerce maintains that businesses have been hit hard by the credit crunch along with a reduction in consumer spending and above all a weaker demand for goods. In order to avoid further damage to the economic slowdown currently taking place in the UK, and prevent considerable future consequences, the MPC is once again under increased pressure.
Rising fuel and food prices are major factors thought to be behind the increase in inflation, which has now become the Bank of England's main point of focus before it is likely to consider any future cuts in the interest rate.
The general outlook for businesses and current trading is one of growing concern, as stated by the Institute of Directors. A survey is due for publication sometime this week.
Published on February 11, 2008
Digg | 
del.icio.us | 
StumbleUpon | 
Reddit | 
Yahoo! | 
My favourites
Latest Finance Articles
Darling's Budget Report Highlights
Chancellor Alistair Darling delivers his first Budget Report yesterday. Highlighted in this article are some of the main points... Read More
March 13, 2008
Lending Falls Again Says CML
The amounts borrowed by first-time buyers and home movers continue to drop as the credit crunch takes further grip on the UK mortgage market. Remortgage activity is on the increase as many switch from fixed-rate deals to tracker mortgages in anticipation of further base rate decreases from the Bank of England... Read More
March 12, 2008
10 Tips To Improve Your Credit
Now more than ever our credit rating affects our ability to borrow credit. Here are 10 tips to help you improve your credit score... Read More
March 7, 2008
Interest Rates Kept At 5.25%
Yesterday, 6th March, the MPC decided to keep the base rate at 5.25 per cent. This decision was to be expected as the Bank focuses on the pressures of rising inflation and a slowing economy. Analysts are predicting another cut to 5 per cent to happen in May unless economic conditions weaken substantially. Whilst some feel the MPC shouldn't wait too long before the next cut, many agree with yesterday's decision... Read More
March 7, 2008
20 Per Cent Of Homeowners Fear Repayments
The UK's financial watchdog, the FSA, published a survey of over 500 mortgage holders which revealed 1 in 5 are worried about being unable to keep up with their mortgage repayments. It is estimated that 1.4 million fixed-rate or discount deals will expire this year raising monthly repayment amounts. Twenty five per cent of those surveyed admitted they had no contingency plans to meet these costs... Read More
March 6, 2008
Refer a Friend
Why not tell a friend about Money Outlet? Click here
