Region's Shadow Monetary Policy Commitee support interest rate hold (From The Northern Echo)

Region's Shadow Monetary Policy Commitee support interest rate hold

10:23am Friday 10th February 2012 in News

BUSINESS leaders have backed the Bank of England’s decision to hold interest rates, as it injects a further £50 billion into the UK economy.

Members of the North-East Shadow Monetary Policy Committee (MPC) unanimously supported the Bank, which yesterday agreed to increase quantitative easing --– effectively printing more cash – from £275 billion to £325 billion, in its decision to keep interest rates at 0.5 per cent.

The Shadow MPC, a partnership between the North East Chamber of Commerce, the Institute of Chartered Accounts England and Wales (ICAEQ) and The Northern Echo, felt more positive about the region’s economy than in recent months but said interest rates must be held to encourage growth.

Keith Proudfoot, northern regional director of the ICAEW, said: "2012 is going to be a long, hard struggle for most businesses, especially those in the North-East and the restraint in the public sector has had, and is continuing to have, a huge knock-on effect on the private sector.

"It’s fantastic to see the Redcar SSI steel plant firing up its furnace again. Hopefully this will trigger a positive knock-on effect in the area and we start to see other things picking up and more job creation."

David Coates, managing director of Newsquest North East – publishers of The Northern Echo, said the economy was still in the doldrums and until there was growth in the property and job advertising sectors he could not support higher interest rates.

Andrew Sugden, policy director at the North East Chamber of Commerce, said: "There is still a lot of nervousness in the economy.

"The North-East has a strong exports base and we should aim to support this strength by maintaining the interest rates."