Keep interest rates low, urge chambers

CHAMBER of commerces in Coventry and Birmingham are urging the Bank of England’s Monetary Policy Committee (MPC) to maintain interest rates at 0.5 per cent when it meets on Thursday.

The MPC’s first decision on interest rates in 2012 is expected to result in no change to the record low interest rate level and Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said that is the key to getting the economy moving in 2012.

She said: “A low interest rate is one of the factors that will give business the confidence and the ability to invest and it is important that they are maintained at this current low level.

“That is what we expect to see in the coming months especially as inflation is expected to start to come down this year.

Michael Ward, president of Birmingham Chamber of Commerce and Industry, agreed, saying raising interest rates will not counter inflation.

He said:  “We are also urging the Bank of England to increase the quantitative easing programme by another £50bn to £32 bn. However, to maximise this, we must also have in place a significant credit easing programme.

“Inflation has largely been driven by global shocks, such as the Eurozone crisis and the impact of the Japanese tsunami, which will hopefully dissipate over the coming months.

“Birmingham Chamber of Commerce Group’s latest Quarterly Economic Survey indicates that business is seeing a slowdown in the regional economy.  It is imperative that we take every measure to stimulate business investment and growth.”