Greater Birmingham business leaders say the Government must not lose sight of the need to rebalance the UK economy, following the Bank of England’s decision to raise interest rates to 0.5 per cent today.
The Monetary Policy Committee voted to raise the base rate for the first time since 2007. The committee also stated any further hikes will be “at a gradual pace and to a limited extent”.
Paul Faulkner, chief executive of Greater Birmingham Chambers of Commerce, said the news shouldn’t detract from the need to strengthen the foundations of the economy.
He said: “Today the Bank of England took the historic step to raise the base rate for the first time in almost a decade.
“A number of commentators have noted how the Federal Reserve took a similar approach at the tail end of last year which saw a strengthening in US economic output and hope the trend will be reflected in the UK –this remains to be seen given the stagnant wage growth the UK has suffered over recent years.
“Nevertheless, we shouldn’t lose sight of the fact that at 0.25%, the rise is incremental and largely symbolic in its application as the MPC looks to curb rising inflationary pressures.
“Also today’s news shouldn’t detract from the real issue – the need to shore up the foundations of the domestic economy.
“The upcoming Autumn Budget is the perfect stage for the Government to set out its plan on how it intends to move away from a reliance on consumer spending to fuel growth and in particular, reiterate the need to invest in infrastructure and upskilling the workforce. Not only will this help rebalance the national economy but also ensure our businesses have the platform required to thrive.
“Furthermore, local firms are increasingly concerned about the competiveness of the UK market and we will be discussing this topic and others at our latest Quarterly Business Report launch which takes place on November 7th at Birmingham City University.”
The launch of the Chamber’s Quarterly Business Report takes place at Birmingham City University’s Curzon Building on 7 November.
