No change for interest rates

From The Publican

By Hamish Champ , 10-Mar-2011

Related topics: General News, Company & City News

The Bank of England has resisted calls for an increase in the base interest rate yet again, keeping it at 0.5 per cent, the level at which it has been for the past two years.

 

The bank's Monetary Policy Committee, which decides on the rate, had come under increasing pressure to raise it for the first time since 2009 in order to combat the threat of inflation, currently running at around four per cent, double the bank's own target.

 

However concerns that a rate increase would stifle what little consumer confidence there is and also send the economy back into recession appear to have won the day and contributed to leaving the rate as it is.

 

Paul Hemming, head of corporate finance at restructuring specialists Zolfo Cooper, said rates being kept at existing levels was good news for the leisure sector.

 

"While on-going inflationary pressure is a concern, most of this pressure stems from beyond the UK," he said.

 

"A move to increase the bank rate at this time would further dampen consumer spending - damaging the recovery - at a time when our own research shows that consumers are already significantly tightening their belts, especially when it comes to what they spend on leisure activities, such as eating out," he added.

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