A leading business group has warned about the consequences of a rise in interest rates.
Ahead of tomorrow’s interest rate decision by the Monetary Policy Committee, Gerry Jones – chairman of the Institute of Directors (IoD) in the South West – said: “Be afraid, be very afraid. There’s a very real possibility interest rates could rise at this month’s MPC meeting, with the decision on a knife edge.
“Obviously with inflation double the target rate and the oil price surging there is a very real challenge to the MPC’s credibility.
“But despite this threat, we think an interest rate rise at this stage in the recovery would be the wrong decision.
“Broad money supply growth remains anaemic and we are very concerned that hiking interest rates at such a time could further undermine the recovery.”