The Confederation of British Industry (CBI) has warned the Bank of England that raising interest rates before next year, which Governor Mark Carney has hinted at, could be a mistake, as the strength of the pound is already causing problems with exports.<\/p>\n
A spokesman for the CBI said that sterling is much too high, adding that the UK has a productivity problem and a lot to do to get an investment-led recovery and it should be remembered that we still have the fourth largest fiscal deficit in the world.<\/p>\n
However, he said that most firms would be able to cope with a gradual rise in the region of around a quarter of 1 per cent but also warned that the recovery could be affected by Scottish independence, uncertainty over the looming general election and the UK\u2019s future in Europe.<\/p>\n
Meanwhile, a spokesman for the manufacturers\u2019 organisation, EEF, said that the manufacturing industry was monitoring the strength of the pound \u201cmore than any time over the past five years\u201d and cautioned that if there is the same level of escalation in the next year as in the past 12 months, then it will cause serious problems for exporters.<\/p>\n
He added that, given the inevitable impact on the pound, increases to the bank rate must be gradual and accompanied by \u201cmeaningful forward guidance on the timescale of further rises\u201d. <\/p>\n
Last week, Ian McCafferty, a member of the Bank\u2019s Monetary Policy Committee (MPC) became the latest to suggest that the first hike since 2007 is fast approaching.<\/p>\n
He said that a good reason not to hold back too long was that it will be \u201ccritically important that rises in bank rate are delivered, as far as we are able, at only a modest, gradual pace\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Confederation of British Industry (CBI) has warned the Bank of England that raising interest rates before next year, which Governor Mark Carney has hinted at, could be a mistake, as the strength of the pound is already causing problems with exports.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/294"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=294"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/294\/revisions"}],"predecessor-version":[{"id":295,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/294\/revisions\/295"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=294"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=294"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=294"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}