IoD Calls for Interest Rate Cut

3 August 2005

The Institute of Directors today called for a quarter point reduction in interest rates ahead of Thursday’s decision by the Bank of England. Failure to cut rates this month could see a pronounced ‘shift-to-thrift’ by companies and consumers, the IoD said.

IoD Director-General, Miles Templeman said:

“Our members are getting gloomier about prospects for the future and we need an interest rate reduction to boost confidence. Recent trading has been well below last year for many firms. A rate cut will help put a floor under business investment and household spending growth.”

The IoD recently reported business optimism amongst its members had halved over the past year, with the balance of those directors more rather than less optimistic about their company’s prospects down to 19% compared to 40% the previous year. Optimism among manufacturers has plummeted from 43% to -8% over the same period.