Press Release
Forimmediate release
Tuesday2 September 2003
IoD says no change in interestrates
The Institute ofDirectors (IoD) said today that the Bank of England's Monetary Policy Committeeis highly unlikely to cut interest rates this week. This indeed would be thecorrect decision under the circumstances, the IoD added.
There are now sometentative signs that the economic situation is improving, the IoD said. Recentsurveys suggest that both manufacturing and the service sector are picking upmodestly and total GDP growth will continue to be supported by the rapidlyrising public expenditure. In addition, the global economy is showing somerecovery albeit modest and patchy. Moreover, the ever-rising personal andpublic sector indebtedness will discourage the Bank from further cuts ininterest rates.
Ruth Lea, Head of thePolicy Unit, said:
"We do notexpect a cut in interest rates this week and there should not be one giventhe predilection of the British consumer to accumulate debt. Moreover, thereare signs that the economy is beginning to pick up though we do not expect arobust recovery in the second half of this year. Moreover, the economy is badlyout of balance, with a growing domestic economy but a stubbornly large tradedeficit.
"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 2.9.03 No.195
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Contact Points:
Ruth Lea, Head of thePolicy Unit, tel. 020 7451 3116
Richard Taylor, PressOfficer, tel. 020 7451 3264
Mobile and out of hours. 07721 734886
Email. press@iod.com
Web. www.iod.com
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