Don't raise interest rates says BRC
Ahead of its decision today, the British Retail Consortium (BRC) is urging the Bank of England to hold its nerve on interest rates and make no change.
A rise in interest rates would hit consumer spending at a time when households are under immense pressure from rising taxes and public spending cuts. The BRC / Nielsen Consumer Confidence survey shows the proportion of people saying they have no spare cash has already reached a record high of 27 per cent.
Inflationary pressures are not coming from the high street but from a combination of soaring global commodity costs and high fuel and energy prices, which an interest rate rise would do little to combat.
Director General of the British Retail Consortium, Stephen Robertson, said: "Raising rates at a time when consumer confidence is weak, the housing market is slowing and lending hasn't revived would only undermine a very uncertain recovery.
"The Bank has already admitted inflationary pressures are down to the VAT rise, mounting energy costs, volatile global commodities and rising import prices.
"Inflation is not coming from the high street where competition is containing shop prices. The economy needs all the support it can get, especially in the light of negative GDP figures. Raising rates prematurely will hamper the recovery and damage retailers' ability to invest, grow and create jobs."
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