MEMBERS of the North East Shadow Monetary Policy Committee (MPC) have voted to keep interest rates on hold with the emphasis being on the need for stability and low cost of borrowing for business during the Brexit negotiations.

One member voted for a rise, citing concerns over inflation, and others felt it was only a matter of time before rates rise.

The MPC is a partnership between The Northern Echo, the North East England Chamber of Commerce and Darlington Building Society, which considers the state of 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.

Chairman of the committee and finance director at Darlington Building Society, Christopher White, said: “I vote to hold interest rates.

"The recent slight easing of inflation to 2.6 per cent doesn't feel like a long-term trend and I feel we will see increases back up again in the future driven by further sterling devaluation and resulting increase in consumer costs on imports.

"However, the recent inflation decrease does mean now would be the wrong time for an increase in the bank base rate.”

Ross Smith, North East England Chamber of Commerce director of policy, said “My vote is for a hold.

"With some respite in inflation this month there is no immediate need for an interest rate increase.

"However, that’s probably just a temporary reprieve, and the point where interest rates need to go up is getting closer.

"The Bank should consider some clear forward guidance to help businesses plan for the time this will happen.”

David Coates, managing director of Newsquest Yorkshire and North-East, which publishes The Northern Echo, said: “I’d continue to hold rates at the present level.

"Despite fears of inflation, bond yields are still low by historical averages and there’s insufficient evidence of a clear economic plan for Brexit.

"So it’s too early to start tightening economic policy in relation to interest rates in my view.”

Richard Hogg, managing director of Jackson Hogg Recruitment, said: “This month I feel it is sensible to hold interest rates and resist any calls for quantitative easing.

"While it is inevitable interest rates will rise, at least in the medium to long-term, we must have stability during the Brexit negotiations, and an increase in the cost of borrowing for businesses and consumers will have both direct and indirect consequences for industry.”

Entrepreneurs’ Forum chairman Nigel Mills said: “Given the uncertainty in the market at the moment, we should keep interest rates at their current level and avoid further quantitative easing.

"Tightening the lines of credit that businesses scaling up rely on could damage economic and employment growth, which in turn could weaken the country’s position when negotiating trade arrangements with the EU and other international partners.”

Graham Robb, senior partner at Recognition PR, said: “Despite downbeat reports, the economy is still growing.

"We need to look for the next opportunity to slightly raise interest rates and it’s quite possible that could be in September.

"This month though it is a hold from me.”

Chris McDonald, chief executive of the Material Processing Institute, said: “I vote to hold interest rates as is.

"My rationale is that my primary concern is about the state of business investment.

"Acknowledging the weaker pound and near record levels of employment, I am balancing that against the persistently low productivity figures, which suggest further investment from business is required.

"The IMF have released a forecast for UK economic growth, which is also somewhat pessimistic and the overall political landscape is highly uncertain, again mitigating against a rise.”

However, Ajay Jagota, chief executive of KIS Group, said: “I would like to see a 0.25 per cent rise.

"I think the previous rises in inflation showed the fragility of this low interest rate position and despite the surprise inflation retraction last month I think it would be prudent to act now.”

But Jonathan Willett, director at Henderson Insurance Brokers Stockton, said: “There is a lot of uncertainty in the economy, with recent growth forecasts suggesting a drop in GDP for 2017, which could impact on business investment.

"The Brexit negotiations don’t seem to be progressing either, so given the ambiguity and unclear future, it would be wise to hold interest rates at their current record low.”

Paul Gibson, director and chartered financial planner (Fellow), of Active Independent Financial Planners, said: “My vote would be to leave rates at current levels.

“In my industry, 300-year low interest rates, combined with Government schemes, are helping keep mortgages relatively affordable and keeping the housing market ticking over.

"Low returns on cash makes investment returns appear relatively much more attractive and has therefore boosted the UK stock market to all-time highs.

"This is providing a welcome boost to pension funds and retirement savings for many clients at a time when there is a squeeze on other parts of their finances.

“With the uncertainties of Brexit on the horizon, a raise in rates would be an unwelcome pressure downwards on house prices and investment values, if that tipped into genuine fear and nervousness, we could spiral into a recession, which is the last thing the country needs today.”

Anne Elliott, chief executive at Latimer Hinks, added: “The economy is going through a delicate period, and so the Bank of England must tread lightly.

"Although there are calls for interest rates to be lifted from certain corners, any rise could have serious implications for homeowners with mortgages and businesses, which have borrowed to invest.

"By maintaining the current level of interest we can at least give some short-term certainty to businesses and borrowers.”