A COMMITTEE of North-East business leaders has unanimously voted in favour of holding interest rates amid fears about the fragility of improvements in the economy.

Ahead of tomorrow's announcement by the Bank of England which is epxected to see rates held at their historic low, members of the Shadow MPC also were against any further Quantitative Easing (QE).

A partnership between The Northern Echo, V&A Vigar & Co (Darlington) LLP, and the North East Chamber of Commerce (NECC), the North East Shadow MPC looks at the region’s economy and gives experts from a variety of sectors the opportunity to argue their case for a shift, or hold, in the rate.

Amanda Vigar, Managing Partner at V&A Vigar & Co (Darlington) LLP and chair of the committee, said: “There are so many uncertainties out there that a shift in interest rates is going to take away confidence.”

Mark Stephenson, NECC Policy and Research Manager, echoed this sentiment, saying: “What I am seeing in the wider economy is a lot of positivity around the region, across most sectors, but the confidence I am noticing is fragile still and is not deep-rooted.”

David Coates, Managing Director of Newsquest North-East, publishers of The Northern Echo and its sister titles, backed up this point, saying that while the general economy was improving, it was from a ‘fairly low base’.

Concerns were expressed about a shortage of professional staff in the construction industry as the sector picks up and a digital skills gap that is emerging not only in the North East, but the UK as a whole.

Catriona Lingwood, Chief Executive of Constructing Excellence in the North East said a lot of people left the industry when it was hit by the recession in 2008.  She said a shortage of staff, such as  engineers and project managers, was going to be a ‘huge issue’ in the wake of a 19th consecutive quarter of growth in the construction sector being reported this month.

It also was felt that the uplift in the region’s economy had not yet cascaded down to the man and woman in the street.

Colin Fyfe, Chief Executive of Darlington Building Society, said: “Although there is a lot more positivity around, I don’t think it is translating in to ‘I am going to move up to the next house size or put on an extension’.  There is still a reluctance to make big purchase decisions.”

Uncertainty generated by the forthcoming general election, the ‘spectre’ of deflation, devolutions issues and Europe, also had an impact on the committee’s decision to keep the interest rate frozen at 0.5%.

Ajay Jagota, CEO of www.kis.co.uk, said: “People are bunkering down to see what happens with the election, particularly in housing.”

However, in contrast Jane Reynolds, Tees Valley Business Manager of North East Finance, said business owners were starting to consider moving to larger premises and taking on more staff. She added: “There’s may be a slight stability that wasn’t there previously.”

Graham Robb, Senior Partner and Owner of Recognition Marketing and PR, believed the North-East economy had ‘steamed ahead’ in the last two months, which was reflected by a 15,000 fall in the unemployment figures and news that economic activity was growing at the fastest rate of anywhere in the UK.

Paul Taylor, Head of Marketing and Sales at Fast Track China (UK) Ltd, was of the view that the region’s export figures were being shaded by industrial giants, such as Nissan and the chemical sector, and if their contribution was stripped out, the North East’s oversea sales would not look so healthy.