Last week’s surprise half percentage point cut in interest rates sparked a wave of relief in the engineering industry, as employers said it would significantly ease pressure on them.
The Engineering Employers’ Federation (EEF) said the prospect of a fall in the value of the pound was a hopeful sign.
But EEF director general Graham Mackenzie issued a cautious response to the decision by the Bank of England’s monetary policy committee: ‘While we welcome this decision, the sector is still experiencing difficult business conditions and, in view of the lagged effect of lost orders, is likely to do so for the rest of 1999.’
Metals suppliers, meanwhile, said destocking over the winter appeared to be coming to an end and that a further cut in interest rates would help improve the situation.
Economists believe that calls for rate cuts from the CBI, the British Chambers of Commerce and the EEF had been heeded by the Bank.