10th January 2008
Interest rate decision disappoints retailers
The Bank of England has decided to keep interest rates on hold this month, at 5.5%.
Retailers had been hoping for a cut in the Bank rate to help stimulate consumer spending.
However, the Bank is thought to have judged that the dangers posed by inflationary pressures currently outweigh the need for a reduction in interest rates.
"This decision makes the need for a cut next month all the more pressing," said the director-general of the British Retail Consortium, Kevin Hawkins. "The worst Christmas sales growth for three years shows consumers and retailers are still feeling the effects of five previous rate rises as other bills continue to shoot up."
The British Chambers of Commerce (BCC) said that it was "disappointed but not surprised".
"A modest interest rate cut would have alleviated the threats to the banking system and would have helped restore the smooth flow of credit in the economy," said the BCC's economic adviser David Kern.
Retailers had been hoping for a cut in the Bank rate to help stimulate consumer spending.
However, the Bank is thought to have judged that the dangers posed by inflationary pressures currently outweigh the need for a reduction in interest rates.
"This decision makes the need for a cut next month all the more pressing," said the director-general of the British Retail Consortium, Kevin Hawkins. "The worst Christmas sales growth for three years shows consumers and retailers are still feeling the effects of five previous rate rises as other bills continue to shoot up."
The British Chambers of Commerce (BCC) said that it was "disappointed but not surprised".
"A modest interest rate cut would have alleviated the threats to the banking system and would have helped restore the smooth flow of credit in the economy," said the BCC's economic adviser David Kern.
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