Interest rate decision is 'no surprise', says CBI

Date: 11th February 2011

Small business owners operating in the UK could be among those interested in the recent comments of one leading industry body regarding interest rates.

The Confederation of British Industry (CBI) has claimed that the Bank of England's decision to keep its interest rate at 0.5 per cent does not come as a surprise.

According to the organisation, while the Bank's Monetary Policy Committee (MPC) voted to maintain the rate at is current all-time low, the situation is set to change some time soon.

Ian McCafferty, CBI chief economic adviser, said: "This announcement to keep rates the same is not a surprise, but with more MPC members showing their concerns about inflationary pressures, the Bank is in the process of shifting its stance.

"Looking beyond the recent surprising GDP data, the CBI still predicts growth in 2011, albeit modest, but recent indicators suggest that the inflation outlook has worsened. We expect the Bank to start preparing the ground for a gradual normalisation of monetary policy around the second quarter of the year."

Posted by Jacob Williams