Teessiders’ mixed views on rates cut
TEESSIDE stands divided over the benefits of an interest rate cut to business, according to an nebusiness poll.
Almost 54% of respondents said the Bank of England should not reduce rates when it meets this week.
While some local firms believe a cut would add to their woes by pushing up fuel and energy costs even further, others say the Bank should be doing more to reverse slowing economic growth and alleviate the financial pain for industry.
Steven Nendick, communications director at Darlington-based engine manufacturer Cummins, was, like many, undecided.
“Many businesses will naturally want a rate reduction but the negative side is that it could drive up inflation and reduce consumers’ spending power.”
He said companies with a good export order book would be less affected by the Bank’s decision than those who conducted business solely in the UK.
“The weakening of the pound against the euro has enabled us to sell more engines into Europe.”
The UK economy grew by only 0.2% in the second quarter of the year and according to predictions today, retailers are going to be harder hit.
Rob Devine of Stockton guitar retailer, Reverb, said: “Customers at the lower end of the income spectrum will be affected if inflation goes up. We’re finding it hard to sell at the cheaper end of the market.”
