CBI: Interest rate cut is affordable
Reacting to the Bank of England decision to leave interest rates unchanged, the Confederation of British Industry has said it hoped it was merely a delay until a rate cut in February.
Kate Barker, chief economic adviser at the CBI said: ‘We believe the Bank can afford to cut without inflation rising above the government’s target. Indeed, without a cut there is a distinct possibility that inflation targets will be overshot.’
Barker said many businesses would view the Bank’s decision as a ‘missed opportunity to ease concern about the impact of a global economic slowdown.’
She added that there was a real need to maintain confidence and encourage firms hesitating over investment plans.
This latest criticism of the Bank is the second in successive weeks by the CBI on the government’s policies. Last week the organisation threatened to withdraw support for the government if it continues to implement ‘inept taxes’ and ‘stifling regulations’.
The CBI attacked the proposed climate change levy, with Digby Jones, the director-general of the CBI, calling it anti-productive and difficult to implement.
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CBI support for government wavers