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Thursday, 8 July 2010

Interest Rates Held at 0.5%

Commenting on the MPC’s decision to hold interest rates at 0.5%, Dr Brian Sloan, Head of Business and Economic Policy at Greater Manchester Chamber, said: “Today’s decision to hold rates at 0.5% is again no surprise despite one committee member voting for a rate rise last month.

“Recent encouraging news on the economy, including our own Quarterly Economic Survey indicating that growth has accelerated in Quarter Two, suggests that there are some underlying concerns over the strength of the recovery and the impact of future spending cuts and tax increases on growth going forward.

“Inflation is still over target and a continuing concern for the Bank, though ongoing problems in the Eurozone, concern over the strength of the US recovery and a clear deficit reduction plan are acting in favour of Sterling, easing some of the upward pressure on inflation that was seen in our economic survey. With this in mind, we feel there is not yet a strong case for rate rises and expect inflation to fall further over the coming months.”

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