For immediate release

Thursday 5 September 2002

IoD welcomes today's 'no change' in interest rates

The Institute of Directors welcomed today's decision by the Monetary PolicyCommittee to leave interest rates at 4%.

The IoD said that there were undoubtedly signs that parts of the economywere falling back after some improvements in the second quarter. Consumerspending seemed to be slowing and even the housing market looked as thoughit was coming off its peak. And, given the nervous state of the stockmarkets, this week was most certainly not the time to be raising interestrates.

Ruth Lea, Head of the Policy Unit, said:

"We welcome today's unchanged interest rates, especially as the stockmarkets are so jittery at present. And, indeed, we are not convinced that astrong and sustainable recovery is firmly established. On the contrary thereare signs that economic recovery is faltering both domestically and in ourmain markets. Moreover, there are now increasing signs that both the housingmarket and, in particular, consumer spending is easing. Given the verybenign inflationary situation, there is no pressure at all for an increasein interest rates. On the contrary, we expect a modest easing by the end ofthe year."

Ends

5.9.02 No. 119

Contact points:
Ruth Lea, Head of the Policy Unit, tel: 020 7451 3291
Graeme Leach, Chief Economist, tel: 020 7451 3366
David Marshall, Director of Public Affairs, tel: 020 7451 3263
Richard Taylor, Press Officer, tel: 020 7451 3264
mobile and out of hours: 07721 734886
e-mail: press@iod.com