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SCC COMMENT ON INTEREST RATES

[ 09-06-2011 ]

Commenting on the decision by the Bank of England’s Monetary Policy Committee to keep interest rates on hold for a further month, Liz Cameron, Chief Executive of Scottish Chambers Of Commerce, said:
 
“The Bank of England are correct to continue with a low interest rate policy against a background of the downgrading of economic growth projections.  Weak domestic demand and inflationary pressures from energy prices mean that raising interest rates now may result in more harm than good, creating a monetary squeeze without impacting on the main causes of inflation in our economy.
 
“Of course, we cannot continue with what are, in effect, emergency interest rates forever.  They do need to make a gradual return to normal levels eventually, but timing is critical and it is still too early for this process to commence.”

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