THE region’s economy needs interest rates to remain unchanged, The Northern Echo’s shadow monetary policy committee surprisingly voted yesterday.

The Bank of England monetary policy committee meets tomorrow and most commentators expect the rate to be cut by up to one per cent, taking it to a historically low one per cent.

On the shadow committee, organised in conjunction with the North-East Chamber of Commerce (NECC), Kevin Rowan, regional secretary of the TUC, led the call for no change. “We’ve had two significant cuts recently, and they haven’t had time to impact yet on the economy,” he said. “This is the wrong time of year and the wrong time in the economic cycle.

“We need to get workers and businesses confident to spend. There needs to be more fiscal measures.”

He urged the Government to look at cutting National Insurance to put more money directly into people’s pockets.

He was supported by Colin Seccombe, chief executive of Newcastle Building Society, who said only 15 per cent of his borrowers benefitted immediately from a cut.

He reported that when rates were cut, borrowers did not spend the windfall, but started repaying some of their mortgage.

“They view reducing debt as an attractive option,” he said.

But Northumbrian entrepreneur Ian Brown and Nigel Mills, who runs a chain of Tyneside newsagents, argued in favour of a cut.

Mr Mills said: “Interest rates are almost irrelevant to the consumer, but they are relevant to businesses like ours which have debt.

“If we can reduce our monthly payments, then we won’t have to attack our labour costs so much. A cut is a beacon of hope.”

However, they were outvoted by four votes to two without chairman Andrew Sugden, of the NECC, having to cast his vote.