MONEY: East Midlands Chamber reacts to interest rate decision

Money
Money

A body that represents businesses in the East Midlands has welcomed the Bank of England’s decision to leave interest rates unchanged.

Despite expectations among many that they would be cut, the bank’s monetary policy committee left rates at 0.5% when it met on Thursday.

Chris Hobson, director of policy at East Midlands Chamber said that while the move was a ‘surprise’ it was ‘understandable’.

He said: “With reports of investments being postponed and markets remaining volatile in the wake of the EU Referendum result, it is perhaps a surprise that the MPC has acted against market expectations by deciding to not cut the UK’s base rate of interest this month.

“However, given that the decision was taken before the appointment of Phillip Hammond as the new Chancellor of the Exchequer, it is understandable that the MPC would want to postpone any potential action until its next meeting in August, when the extent to which confidence has been affected by Brexit, and what fiscal policy under the new Chancellor might look like, will be clearer.

“Investment in the UK – whether it be personal, business or Government – is key to creating confidence and we need bold, measured and responsible monetary, fiscal and economic policy to encourage this, matched by action from Government to boost job creation, exports and growth.”