PracticeConsultingCBI chief from KPMG slates government over interest rate hike

CBI chief from KPMG slates government over interest rate hike

Digby Jones, chairman of the CBI and a former senior partner at KPMG, has described the rise in interest rates by one quarter of a percentage point as 'disappointing'.

His comment came after the Bank of England raised interes rates to 5.75%.Jones said: ‘We recognise that there is a risk to the government’s inflation target if economic growth is not checked a little. It is better to nudge the tiller now rather than make major change at a later date.

‘But the rise will be unwelcome to exporters and small manufacturing firms that are struggling to keep their market share in the face of continued sterling strength.

‘Recent data has been positive, but downward price pressures on retailers indicates that we are some way off a consumer boom. Indeed, there is little sign of rising inflation in many parts of the industrial scene.

‘Growth should be given more of a chance. The Bank should now leave rates on hold until the post-Millennium trends become clear.’

A statement from the Bank of England said: ‘Inflation is currently below the 2«% target and is expected to remain so for a while, but it is likely to rise above target further ahead, reflecting developingpressures in the labour market and on productive capacity.

Accordingly the Committee concluded that an increase in interest rates of 0.25% to 5.75% was neededto meet the inflation target in the medium term.’

ACCOUNTANCY AGE INTERVIEW: New CBI director general is a man of the people

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer