Business leader urges interest rates freeze

A MIDLANDS business organisation has called on policy makers at the Bank of England to ensure interest rates remain at their record low of 0.5%.

Members of the Monetary Policy Committee meet tomorrow to discuss whether to change to the rate or not. Most analysts believe they will vote to keep the rates at their historic low.

With manufacturing output reaching its lowest level for five months and renewed fears about inflation and public sector cuts many feel the fragile economy is under enough strain without having to contend with the pressure of higher borrowing.

Louise Bennett, the chief executive of the Coventry and Warwickshire Chamber of Commerce, said low rates remained a key factor in a sustained economic recovery.

However, she said that even with rates as low as they were many small and medium-sized businesses were still struggling to get access to finance.

Ms Bennett said: “There have been promising economic signs. Our own quarterly economic survey showed signs of confidence returning and the recent GDP figures suggested stronger growth than most predicted.

“But with public sector cuts yet to filter through and a need for the private sector to create the jobs of the future, there should be no rush to dampen the economy.

“What we really need to see is banks lending reasonably to businesses again. We have heard the rhetoric but I still see companies day in, day out who are not able to grow because they cannot get the finance they need.

“That needs to be addressed immediately rather than putting up interest rates.”

• Business leader urges interest rates freeze
• Funding cuts could harm export growth warns expert
• Coventry Chamber backs breakaway LEP