Press Release

For immediate release

Thursday7 November 2002

IoD unsurprised by todays no change in interest rates

The Institute ofDirectors said that it was not surprised by the Monetary Policy Committeesdecision to leave interest rates at 4 per cent.

The IoD said that theeconomy was very difficult to read at the moment. There were, for example,signs that parts of the economy were falling back after some improvements inthe second quarter. The manufacturing sector, in particular, seemed to bedeteriorating with both survey evidence and official data looking weak.Septembers output fell. But there was mixed evidence concerning consumerbehaviour. On the one hand, latest car sales were down and there were reportsof falling consumer confidence but, on the other, recent surveys havesuggested a retail revival and the latest consumer credit figures were verystrong. In addition, the housing market remained remarkably firm, buoyed by lowunemployment and low nominal interest rates.

Ruth Lea, Head of thePolicy Unit at the IoD, said:

This monthsdecision by the Monetary Policy Committee to leave rates unchanged is notsurprising. A rise would have been out of the question, given the weakmanufacturing sector and the still fragile stock markets. But we appreciatethat the housing market remains very warm and that recent consumer credit datahave been very strong. And we understand why the Bank has not cut today. We do,however, expect the housing market to come off the boil there are alreadysome tentative signs and when it does we expect and would call for the Bankto cut.

Ends

Contact points:

RuthLea, Head of the Policy Unit, tel: 020 7451 3291

David Marshall,Director of Public Affairs, tel: 020 7451 3263

mobileand out of hours: 07764 883420

Richard Taylor, PressOfficer, tel: 020 7451 3264

mobileand out of hours: 07721 734886

e-mail: press@iod.com

web:www.iod.com

Notes to Editors:

The Institute of Directors is anon-political independent organisation

with some 55,000members. In addition to its wide range of business services, the IoD provides an effective voice torepresent the interests of its members to government and key opinion-formers.It also brings the experience of business leaders to bear on the conduct ofpublic affairs