InterestRate Freeze Almost Certain, says IoD

Interest rates willalmost certainly stay on hold this week, the Institute of Directors (IoD)predicted today. The Bank of England's Monetary Policy Committee will vote tokeep the base rate at 3.75% in order to allow more time to assess the impact ofthe previous rate rise, the IoD believes.

Graeme Leach, ChiefEconomist at the IoD, said:

We think the Bank ofEngland will keep its powder dry. If the economy looks strong in the New Year,a half-point rise by March is then quite possible. Looking further ahead webelieve consumer spending will slow in 2004 and a re-balancing of the economywill occur. As a result, we are more confident than financial markets about theinterest rate outlook. We believe interest rates will only peak at 4.5% by theend of next year.

Ends 2.12.03 No.213

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Noteto editors

TheInstitute of Directors is a non-party political independent organisation witharound 55,000 members. In addition to its wide range of business services, theIoD provides an effective voice to represent the interests of its members togovernment and key opinion-formers. It also brings the experience of businessleaders to bear on the conduct of public affairs