Bank must 'cut rate' to stem unemployment

Date: 17th December 2008

The Bank of England must cut its interest rate to stem the tide of rising unemployment, the British Chambers of Commerce (BCC) has said.

Labour Market Figures published by the Office for National Statistics today (December 17th) show that the number of those in the UK out of work has risen by more than 75,700 to over one million in total.

In response to this, the BCC believes that the Bank's monetary policy committee (MPC) must slash its rate to one per cent to revitalise the economy.

David Kern, chief economist of the BCC, commented: "These labour market figures confirm the worsening recessionary pressures facing the UK economy.

"With unemployment set to rise sharply over the next year and inflation likely to plummet, we urge the MPC to cut interest rates by one per cent in January."

Last week, the Conservative Leader claimed in a speech at the London School of Economics that public spending had to cut to lower taxation.