Business Welcomes rate freeze

Members of Birmingham's business community have welcomed the monetary policy committee's (MPC) decision to hold interest rates at 4.75%. The decision is the committee's first since Labour was re-elected and marks nine months of interest-rate stability. Ronnie Bowker, managing partner at accountants Ernst & Young and board member of lobby group Birmingham Forward, said: "The decision to hold interest rates steady is a vital one at a time of both political and economic uncertainty. "Although the incumbent party has been re-elected to Government, there is ambiguity surrounding Tony Blair's future which could prove unsettling over the coming months. "The economic data is also contradictory, with the housing market remaining flat and consumer spending falling, while inflation has reached a seven-year high. "While record debt and bankruptcy levels mean there is a clear pressure to reduce rates, rising inflation could be just as dangerous for businesses, especially those looking to export goods and services. "Holding rates steady is the only logical option, providing a little certainty for the business community in what are certainly interesting times."

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