Low interest rates are working as exports soar

Business leaders are urging the Bank of England to keep interest rates at 0.5 per cent as the number of companies taking advantage of low interest rates to increase exports is soaring.

The Bank of England’s Monetary Policy Committee is due to announce its decision on rates on Thursday.

The Documentation Department at Birmingham Chamber of Commerce Group says that the number of export documents processed for the first six months of this financial year is 14 per cent up on the same period last year and six per cent up on the second half of last year.

Katie Teasdale, head of policy, said:  “While the increase in documents processed is slowing, there is still a trend upwards.  Any rise in interest rates would damage sterling’s competitiveness abroad making our exports less competitive.

“The anticipated injection of £50 billion into the economy through the quantitative easing programme, which will raise the total amount of new money to £175 billion, should provide businesses with more money to invest in new markets.

“Many of the causes for the current high levels of inflation are global and the Eurozone crisis doesn’t encourage exports.  However, 99 per cent of the documents we process at the Chamber are outside the European community.  So companies are taking advantage of the relatively strong Asian markets, such as China.”