Bank of England, Bank holds interest rates at 4 per cent
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Manufacturing News, Source : The Manufacturer
Published : 04 Apr 2002 12:16
The Bank of England today held interest rates at four per cent in order not to undercut the fragile recovery in manufacturing.
The move comes inspite of recent evidence that manufacturing has turned the corner on one of its worst periods in recent memory. Factories recorded their strongest activity levels in more than a year last month, according to the latest information on the sector from the Chartered Institute of Purchasing and Supply.
The CIPS index rose to 50.7 from the 50.2 recorded in February, with factories supplying consumer goods outperforming the rest of the industry. Readings above 50 indicate that the sector is expanding.
While there is pressure in some quarters to raise the cost of borrowing, the trade union Amicus warned that manufacturing is still in too fragile a state for higher rates and in fact needs lower rates.
But with signs of a pickup in manufacturing recovery, coupled with a turnaround in the US, that seems a forlorn hope. The expectations are that the next move will be upwards, with many in the City expecting the Bank to raise rates in May or June.
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