Interest rate rise hits hopes for recovery

Industry groups reacted with dismay at Wednesday’s decision by the Bank of England to raise interest rates. Martin Temple, director-general of the EEF, said: `Away from the south east, confidence in many regions and industry sectors is still fragile. Coming so soon after the last cut, this will damage the whole credibility of the decision-making […]

Industry groups reacted with dismay at Wednesday’s decision by the Bank of England to raise interest rates.

Martin Temple, director-general of the EEF, said: `Away from the south east, confidence in many regions and industry sectors is still fragile. Coming so soon after the last cut, this will damage the whole credibility of the decision-making process.’

Higher interest rates are likely to strengthen sterling, making UK-made goods less competitive. Ian Peters, deputy director-general of the British Chambers of Commerce, said: `This decision threatens to put a still tentative recovery into reverse.’

The CBI said the strong pound had already put a dampener on manufacturers’ investment plans.

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