8:27am Friday 6th June 2008
BUSINESS groups in the North-East yesterday welcomed the decision to hold interest rates at five per cent, but urged that more be done to help the region's companies during the current economic turmoil.
The Bank of England's monetary policy committee (MPC) voted against a cut in rates, despite concerns about the UK housing market and wider economy. The news is also a blow to homeowners facing rises in the cost of petrol, mortgages, food and energy.
Yesterday, the bank and the Government were urged to do more to help businesses.
Richard Bottomley, president of the North-East Chamber of Commerce and partner at KPMG in Newcastle, said: "The bank's decision to hold interest rates was largely to be expected. However, with food and fuel prices soaring, more needs to be done to reassure businesses than can be achieved through monetary policy alone.
"Of particular concern is the uncertainty surrounding energy and the price escalation at the petrol pumps."
CBI regional director Sarah Green said: "The bank had little option this month other than to leave interest rates on hold - oil and commodity prices are still of great concern and businesses are having to raise prices as profit margins get squeezed further."
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