Pictured above: Ross Gurdin
Low interest rates are encouraging the manufacturing sector to
boost exports, helping to rebalance Britain's economy. To continue
the positive momentum, business leaders are urging the Monetary
Policy Committee to keep interest rates on hold this week.
Ross Gurdin, Policy advisor at Birmingham Chamber of Commerce
Group said in the face of such a fragile recovery, it would be
unwise to raise interest rates. He said: "One of the Government's
aims is to rebalance Britain's economy and it is clear that
exporting is leading the way. The manufacturing sector has seen a
significant boost with the devaluation of the pound by about 25 per
cent since the credit crunch. High quality British goods are now
much cheaper in foreign markets and British manufacturers are able
to more readily compete on price.
"An early interest rate rise would dampen consumer spending even
further as cash strapped households would face higher mortgage
repayments and have even less money to spend.
"Many of the current causes of inflation are international
pressures such as the rise in energy prices, droughts and floods
that have destroyed many crops and thus increased the price of food
and wages in developing countries such as India. It is therefore
unlikely that a rise in UK interest rates would address these
problems."