No relief in sight as interest rates remain unchanged at 5%
More misery for retailers and the cash strapped consumer.
The BRC has said that The Bank of England’s decision to leave interest rates unchanged heaps more pressure on businesses and individuals’ personal finances. BRC Director General Stephen Robertson said: “As last week’s election results showed the strain on personal finances is one of people’s key concerns. I understand the Bank has the difficult balancing act of keeping inflation under control while sustaining the economy but financial indicators overwhelmingly point to a gloomy outlook. There’s little sign yet of the rate cuts since December having much effect. With interest rate changes often taking a year to work through, the sooner the Bank cuts again, the sooner and greater the relief for hard-pressed consumers and retailers.”
The Bank of England said last week that the worst of the global financial crisis was over but warned that banks were in danger of self-fulfilling a financial meltdown by being over cautious.
The Bank’s latest Financial Stability Report (FSR) published last week said lenders are too cautious of another credit crunch and as a result is slowing the return of confidence to the markets.
