21-11-2007
Reduction of interest rates no longer deemed necessary
News by Adfero for Simply Business - independent providers of business insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
With output figures described as "resilient", there has been a decrease in the pressure on the Bank of England to reduce interest rates, it has emerged.
According to reports by the Financial Times, with there being existing evidence of pricing pressures in the UK economy, such as the cost of oil, in addition to healthier-than-expected output data economists believe there to be less of a need for the Bank to cut rates.
Indeed, data released by the Confederation of British Industry (CBI) shows that those in the country's manufacturing sector are expected to increase prices over the course of the forthcoming quarter.
"Recent tightening of economic policy is starting to be felt and manufacturers are downgrading their expectations for future growth in their output," said Ian McCafferty, chief economic adviser at the CBI.
"But despite this, companies are having to push up their prices to compensate for heavy cost burden," he added.
During today's trading, oil prices have surged, coming close to breaching $100 (£48) a barrel.