Mortgage let-off as CBI calls on Bank for interest rate freeze

The CBI has called for a halt on interest rate rises as its quarterly survey shows falling business confidence and hints at slowing growth.

14:55 27 October 2004

The CBI has called for a halt on interest rate rises as its quarterly survey shows falling business confidence and hints at slowing growth.

Profit margins are being squeezed as commodity prices rise and output slows, leading to job cuts and a drop in expected growth in the coming year.

Head of UK economics Ian McCafferty said: "Although orders and output have risen, the rate of increase is slow.

"Manufacturers are cutting back on investment and jobs as they become less confident in the pace of recovery."

In a direct plea to the Bank of England he said: "Taking into account everything else we know about the economy as well, we urge the Bank of England to keep interest rates on hold for the foreseeable future."

The Bank has upped interest rates five times in the last year and is set to meet next week to decide whether to change the rate of borrowing for November.

The survey notes that only 17 per cent of businesses expressed confidence in the future, compared with 27 per cent with a negative opinion, a deficit of ten per cent.