The Bank of England’s rate-setting Monetary Policy Committee (MPC) has held interest rates at 5.25%.
It is thought the decision, which was in line with analyst and market predictions, was taken due to fears of growing inflationary pressures. But while many lobby groups said the decision was unsurprising, the overwhelming consensus was that an interest rate cut is necessary to stabilise the flagging British economy.
The British Retail Consortium’s director general Stephen Robertson said the Bank of England still has an opportunity to act before it’s too late: “As interest rate cuts take several months to take effect, the Bank needs to take action sooner rather than later to ensure that the slowdown doesn’t risk turning into something more serious.”
However, David Kern, economic adviser to the British Cambers of Commerce disagrees: “The MPC has missed an important opportunity to underpin business and consumer confidence and limit the potential damage to the economy.”
The MPC is now under pressure to slash the interest rate in April. It has been cut twice since November, most recently being reduced by a quarter of a percentage point in February.
© Crimson Business Ltd. 2008
