BUSINESS leaders in the North-East have voted unanimously in favour of keeping the interest rate at 0.5 per cent amid concerns that there is still too much fragility in the economy.

A partnership between The Northern EchoV&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.

A slowdown in markets in which the UK has no control, uncertainty in some areas of the economy, the patchiness of the recovery and the continuing existence of a North-South economic divide were among the reasons presented to keep interest rates at their current historically low level.

Amanda Vigar, managing partner at V&A Vigar & Co (Darlington) LLP, said: “There still is too much uncertainty in global markets for the UK economy to be able to handle higher interest rates, which would have the potential to curb the country’s fiscal recovery.

“Far better to wait until there has been a sustained period of stability on the world economic stage before the Bank of England’s MPC considers making an increase.”

Jonathan Walker, NECC Head of Policy and Campaigns, said: “A mixed picture is what we have picked up at the Chamber. The economy is not in dire straits, but we have noticed a softening across most indicators including future sales and orders, both domestic and export.

“This is perhaps dampening some people’s confidence more than it should be. Investment plans have seen the biggest drop in both recruitment and training, and plant and facilities.”

He added: “While there is no cause for alarm, there are negative signs out there which we need to keep an eye on, which are caused by factors outside our control such as the slowdown in China.”

Anne Elliott, chief executive at Latimer Hinks Solicitors, felt a more sustained period of stability was needed before an interest rate rise could be considered. She added: “We have just had a real jolt in this area with SSI. Teesside had seemed buoyant until this happened. The economy is still experiencing shifting sands.”