Bank keeps interest rates on hold
Interest rates have been kept on hold today despite warnings by business leaders and trade unions that delaying a cut in the cost of borrowing would threaten economic recovery.
CBI director general Sir Digby Jones said this week that business confidence and slow retail sales made a decent case for a cut in the base rate sooner rather than later.
Business leaders, trade unions and government officials in key eurozone countries like Germany and Italy have reiterated his comments, urging the European Central Bank (ECB) to take the base rate of borrowing below its current level of two per cent.
The sluggish eurozone has been a long-standing problem for UK exporters, along with last year’s increases in the domestic interest rate and record oil prices.
Despite this pressure, the Bank of England’s monetary policy committee voted to leave their base rate unchanged at 4.75 per cent. The ECB is expected to follow suit.
