CBI joins calls for interest rate freeze
The Confederation of British Industry (CBI) has joined the calls for a freeze on interest rates.
Their latest consumer sector survey shows a slow down in the consumer service sector with business volumes remaining static for the first time in 18 months, and profitability failing to increase for the first time in nine months.
Sector confidence also fell for the first time in nine months.
This latest data echoes other recent surveys showing a significant fall in consumer spending.
Ian McCafferty, CBI chief economic adviser, said: “Weakening consumer demand on the high street has now spread to the service sector. Consumer services firms have been disappointed by weaker-than-expected business volumes and confidence has been hit.
“Recent months have seen economic growth slow across the economy. The service sector has joined the unhappy ranks of retailers and manufacturers that are struggling in the face of softer demand. In this challenging economic environment the Bank of England needs to maintain stability by leaving interest rates on hold tomorrow.”
Ian Smart, partner at Grant Thornton, added that consumers are: “Avoiding big ticket purchases on services too, perhaps throwing into question the success of the forthcoming summer season for travel operators and the like.
“With flat profitability levels, consumer services firms could well do without a further increase in interest rates.”
The Bank of England’s Monetary Policy Committee will announce on Thursday whether there will be any change in interest rates.
