Business leaders are calling for the Bank of England to cut in interest rates by 1% to help “cushion the economy”– the biggest single move since January 1993.
The Confederation of British Industry (CBI) claims that a 1.0% cut would help underpin business and consumer confidence, while giving some much needed support to public sector spending.
The Bank’s Monetary Policy Committee (MPC) is expected to deliver its verdict on Thursday.
CBI deputy director general John Cridland said “the need for a further rate cut is clear”.
“The recession into 2009 will be both longer and deeper than expected, and we need the strong medicine of a full percentage cut.”
The MPC cut interest rates by 0.5% but official figures since then have highlighted the economy’s gradual slide towards recession.
Small firms are beginning to feel the strain – the Federation of Small Businesses (FSB) has said that over 1.5 million small businesses risk going bust during the credit crunch.
© Crimson Business Ltd. 2008