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Manufacturers welcome 1.5% base rate cut
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06/11/2008
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The Bank of England’s Monetary Policy Committee’s surprise decision to cut interest rates by 1.5% today (6 November) has been welcomed by manufacturers.
The manufacturers’ organisation EEF said it was “a welcome bold move” that “passes the baton” to the government to take further measures in its forthcoming budget.
EEF chief economist, Steve Radley, said: “The Bank has clearly recognised that unchartered territory requires unconventional measures and has torn up its previous script. The baton now passes to government to do its bit with timely and targeted measures in the forthcoming pre-budget statement.”
At business advisory firm Deloitte, UK manufacturing industry leader David Raistrick (pictured) believed that the cut would alleviate the threat of a deep and prolonged recession and continued falling output.
“Manufacturers are being hit hard by several adverse shocks at the same time - slowing domestic demand, a sharp downturn in activity across key export markets, continued difficulties in accessing finance, and extended higher fuel and raw material costs,” he went on. “Although the weaker pound is helping UK manufacturing exports, this is being more than offset by deteriorating domestic demand in key export markets, notably the Eurozone and the United States. In light of these issues, today’s generous cut in interest rates provides welcome news for manufacturers, because the health of the sector is clearly dependant on the recovery of demand and consumer confidence."
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Author
Ken Hurst
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