Keeping interest rates low is the right thing to do sayWest Midlandbusiness leaders, although it will not help lower inflation which is the biggest concern among the region’s manufacturers.
Birmingham Chamber of Commerce Group’s (BCCG) latest quarterly economic survey revealed that 23 per cent cited inflation as the major external factor putting pressure on their business.
However high inflation is largely due to global and environmental problems said Michael Ward, president of BCCG. He said: “And keeping interest rates low will make it easier for businesses to stay afloat by making it cheaper to borrow.
“Our quarter four survey reveals that investment plans are static and low with only 22 per cent of manufacturers planning to invest in equipment. Low interest rates might engender confidence enough to encourage businesses to invest, grow and create jobs.
“We were disappointed that the Bank of England did not see fit to increase the quantitative easing programme. To provide a liquid market and help exporters, the QE programme needs to increase by £50 billion to £325 billion. Higher raw material costs in energy intensive manufacturing are not helping businesses to export, so putting more money into the system would be a plus.”
