Rate hold unsurprising as inflationary pressures mount - CBI

Submitted by on Fri, 9.05.08

Commenting on the decision by the Bank of England's Monetary Policy Committee (MPC) to keep interest rates on hold at 5.0% today (Thursday), Sarah Green, Regional Director, CBI North East, said:

"The latest data shows the economy is slowing, albeit only gradually, and at the same time inflationary pressures continue to mount. So, the Bank faced a difficult decision, but it is no surprise that rates were kept on hold this month.

"While the housing market and linked activities are very weak, activity elsewhere is slowing, but is well short of recession. Meanwhile, energy and raw material prices continue to climb, meaning inflationary pressures are intensifying as producers are forced to pass these on."