Unions call for interest rate cuts

Unions have called for interest rate cuts to help Britain's manufacturing sector.

10:19 16 December 2004

Unions have called for interest rate cuts to help Britain's manufacturing sector.

The Bank of England has held interest rates at a three-year high of 4.75 per cent for the last four months, however data out this week seems to suggest a possible rise early on next year.

"Interest rates must not go any higher. The next move on interest rates should be downwards," said TUC general secretary Brendan Barber.

Action was needed to preserve Britain's "critical mass" in manufacturing, he explained.

"Intelligent public procurement, working to support both the UK economy and its industrial base, is long overdue," he said.

This week inflation figures came out for November, well ahead of predictions.

Inflation rose 0.3 per cent over the month, a 25 per cent increase on October.

This put inflation higher than the Bank of England's prediction for the month.

The Bank raises and lowers the basic rate of borrowing in the UK with the goal of keeping inflation to its two per cent target.

The Institute of Directors believed that this latest inflation reading was consistent with a quarter-point rise in interest rates early next year.