IoD not surprised by interest rates 'nochange'

The Institute ofDirectors said that is was not surprised by the Monetary Policy Committeesdecision to leave interest rates unchanged.

Ruth Lea, Head of thePolicy Unit, said:

"We welcomedlast months cut in interest rates because of the poor economic outlook. But weare entirely with the Monetary Policy Committee in their decision to leaverates unchanged this month. There are some tentative signs of recovery in theeconomy and the predilection for the British consumer to accumulate debt shouldbe a worry for policy makers. But, having said that, we do not expect a robustrecovery in the second half of this year. Moreover, the economy is badly out ofbalance with weakness in many parts of the private sector, includingmanufacturing, but buoyancy in others including the bloated public sector,construction and retailing.

"The globalsituation continues to be a concern, even though there are some moreencouraging signs out of the Eurozone countries and, particularly, the US. Andwe do not expect a return to rapid growth in the near-term. This willinevitably hold back Britains export sector.

Ends 7.8.03 No.189

Notefor 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

Contact Points:

Ruth Lea, Head of thePolicy Unit, tel: 020 7451 3291

Richard Taylor, PressOfficer, tel: 020 7451 3264

mobile and out of hours: 07721 734886

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

mobile and outof hours: 0776 4883420

email: press@iod.com

web: www.iod.com