EEF commends interest rate freeze

EEF, the manufacturer's organisation, has welcomed the decision by the Bank of England's Monetary Policy Committee (MPC) to keep interest rates stable. The Bank has held rates at 0.5 per cent since March 2009.

Following the MPC's two-day meeting in London, the nine-member panel has also decided to leave the size of its quantitative easing programme at £200 billion.

Commenting on the decisions, EEF senior economist, Jeegar Kakkad, said: “The MPC is right to maintain its 'no change' policy. Although the UK has seen a strong, manufacturing- led recovery, the committee will have had to weigh the risks to growth from currency wars and public sector cuts against concerns that persistent inflation and the VAT rise would fuel price and wage pressures. Currently, there is no clear case for a move in either direction.

“Further pressure for more Quantitative Easing should also be resisted. While manufacturers know that future growth cannot be taken for granted, they fear that further QE would simply store up longer-term problems with minimal benefit to the recovery.”