Press Release
Forimmediate release
Tuesday8 July 2003
IoD calls for cut in interestrates
The Institute ofDirectors (IoD) said today that the Bank of England's Monetary Policy Committeeshould cut its key rate from 3 per centto 3 per cent at this weeks meeting.
The IoD said thatsuch a cut was fully justified by the poor economic outlook. The manufacturingsector remained in recession and, given the poor international outlook, wasunlikely to recover in the near future despite the pound weakening against theeuro since the beginning of the year (although it has firmed recently).
Retail sales growthhas slowed significantly and consumer credit growth seemed to be weakening onan underlying basis. In addition, there were signs that the housing market hascome off the boil, especially in London and the South-East.
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Ruth Lea, Head of thePolicy Unit, said:
"The economyneeds a stimulus, given the poor international outlook. There is little doubtthat the global economy is in the doldrums with the major economies all havingdeep-seated problems. The situation in Germany is of particular concern.Moreover, domestically, consumer spending and the housing market, the parts ofthe economy that underpinned growth last year, are now moderating. And thisyears tax increases are undermining business and consumer confidence.Inflationary pressures remain modest.
Ends 8.7.03 No.179
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