FDs call on Bank to halt rate rises
Finance directors have counselled the Bank of England monetary policy committee not to raise interest rates again when it meets next week, writes Gavin Hinks.
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,p> The call came after a succession of interest rate rises that have seen the basic rate climb from 3.75% to 4.75% since the beginning of the year. This week’s Accountancy Age/Reed Finance Big Question survey revealed that almost half of the UK’s FDs (44%) believe Bank of England governor Mervyn King should leave interest rates alone.
One FD polled said: ‘The economy seems to be responding and needs to be left a few months. Any further increase in interest rates may lead to an overcooling of the economy and a repeat of the early nineties.’
However, 39% of the finance directors questioned believed another rise was appropriate. Tim Carr, FD at Charcol Holden Meehan, said: ‘Consumer credit rises, fuelled by public confidence off the back of potentially artificially high equity in property, need to be brought under control.’