BCC urges Bank of England to keep interest rates unchanged

18 April 2005
The British Chambers of Commerce has advised the Bank of England that it should keep interest rates unchanged until the summer.

Lowering confidence among manufacturers and service sector firms is the main factor behind the BCC's advice.

In its latest survey of the first quarter, the BCC found that domestic sales had fallen to their lowest level since the middle of 2003 - and it believes that any increase in interest rates could be fatal for the sector.

"It is clear the economy is slowing and the business environment is becoming riskier and more difficult," said BCC director general David Frost.

"The monetary policy committee should not consider interest rate increases until August at the earliest.

On April 8th the Bank of England voted to keep UK interest rates at 4.75 per cent for the eighth consecutive month, but there were some dissenters amongst the monetary policy committee.

Paul Tucker and deputy governor Andrew Large voted in favour of a rise, and economist Howard Archer from Global Insight said that "a quarter-point rate hike as early as May is still a distinct possibility."

The longer interest rates remain unchanged, the better for mortgage-holders.

Click here to find out more about flexible mortgages.

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