Newspaper article The Evening Standard (London, England)

Bank Risking Recession by Leaving Interest Rates at 5%

Newspaper article The Evening Standard (London, England)

Bank Risking Recession by Leaving Interest Rates at 5%

Article excerpt

Byline: ROBERT LEA

THE Bank of England is in danger of pushing the country into recession, business and retail leaders have warned.

They spoke out after the Banks monetary policy committee today left interest rates untouched at 5%.

The economy urgently needs an interest rate cut to counter threats of recession, said David Kern of the British Chambers of Commerce. The MPC cannot ignore the dangerous effects of rising insolvencies, falling house prices and worsening pressures on the banking system.

Retailers joined the attack. Major retailers are telling the Bank weakening sales and record low consumer confidence show the downturn is deepening, said Stephen Robertson, director general of the British Retail Consortium. To avoid turning the slowdown into a slump, as soon as conditions allow the next rate move should be down.

The Bank declined to comment. Most economists say it is hamstrung in that it cannot cut rates while inflation way over target at 3. …

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