Commenting on today’s interest rate decision by the Bank of England’s Monetary Policy Committee, Babs Murphy, Chief Executive of the North & Western Lancashire Chamber said:
“The cut in interest rates together with additional quantitative easing measures should improve business and consumer confidence. However, whilst lower interest rates may give a helpful boost to market confidence, they are unlikely to have a long-term effect on businesses when rates are already so low. What businesses want is low, stable interest rates for the foreseeable future, which will enable them to make their own growth and expansion plans with confidence.
“The MPC indicated that despite the historic low of 0.25%, the base rate could be cut even further in the coming months. Further rate cuts are unlikely to stimulate the real economy significantly, and also bring the threat of negative interest rates on businesses’ deposits, which will be of significant concern to some.
“Instead of further cuts to rates in the future, the MPC should give careful consideration to developing the other measures announced in order to drive longer-term UK business growth. This could be through further purchases of business bonds, and expanding the scope of their intervention to include investments in the UK’s ageing infrastructure in key areas such as transport and communications.”
