An independent central bank would help exporters by reducing interest rates, the Liberal Democrats claimed this week, highlighting the party’s policies on trade and industry.
Investors have been piling into the pound in anticipation of a post-election interest rate rise to cut Government borrowing. This is making British exports expensive.
Nick Harvey Liberal Democrat spokesman on trade and industry, said: `Independent central banks have more credibility with the financial markets than politicians. Markets offer them lower interest rates because there is less risk of resurgent inflation.
`We have earmarked the interest savings from having an independent bank to cut Government borrowing. This will relieve upward pressure on the pound.’
The key to securing a long-term future for UK manufacturing, said Harvey, was a `stable business environment, including a stable pound, and improved education and skills for the workforce’.
The Lib Dems claim to be the only party which can deliver a £2bn investment in education. It has publicly costed its promises and would fund the investment by a penny rise on basic income tax.
A single European currency, which the Lib Dems are alone among the major parties in backing, would also underpin Britain’s high share of all the foreign investment coming into the European Union, said Harvey.
`This too will stimulate and build a long-term future for manufacturing,’ he said.
`If we fail to join much of the existing investment flows are likely to go elsewhere.’
The Lib Dem manifesto also promises to make export promotion and commercial activity a higher priority for British embassies.