Centre for Economics and Business Research

Interest Rates Kept at 0.5%

The Bank of England‘s Monetary Policy Committee has held the base interest rate at 0.5% for a record 18th consecutive month in a row. With continued concern over the state of the economy amidst sharp cuts in public spending by the new coalition government the decision was welcomed by David Kern, Chief Economist at the British Chambers of Commerce, who commented: “The MPC made the right decision by leaving interest rates and the quantitative easing programme unchanged this month. However, uncertainty over future interest rate policy is damaging confidence. Businesses cannot properly plan for recovery without clear knowledge that rate rises will be off the agenda for an extended period.” “Global risks of an economic setback appear to be worsening, so the welcome news ... »

Recession Arrow

Recession to be worse than 90s slump

The current recession is expected to be worse than the economic slump of the 1990s, the British Chambers of Commerce (BCC) has warned. The BCC’s quarterly economic survey has predicted that UK GDP is expected to decline by 2.9% between the third quarter of 2008 and the third quarter of 2009. This would be greater than the 2.5% drop between 1992 and 1993. The survey also forecast that the UK economy would contract by 2.2% in 2009 — worse than the 1.6% negative growth it predicted last November. BCC director general David Frost said: “Some of the strain can be avoided, but only if the Government can address the two key problems of confidence and cashflow. We must avoid losing viable companies during this downturn.” “It will be business that drives the UK out of ... »