A leading business organisation believes the Bank of England’s forward guidance has cleared up a major uncertainty for companies across Coventry and Warwickshire.
The Bank’s recently appointed governor, Mark Carney, says interest rates won’t rise until unemployment in the UK falls to seven per cent or lower.
That meant there was no change to the 0.5 per cent rate when the Bank’s Monetary Policy Committee met today (Nov 7).
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “The guidance has proved very helpful.
“Of course, businesses don’t spend their days tracking the base rates but it helps when you are running a company to have as few uncertainties as possible.
“There have been some criticisms of the policy, especially now unemployment appears to be falling more strongly than many had anticipated, with critics saying rates will now have to rise more quickly.
“But, actually, what it means is the more robust the economy, the more capable it will be of withstanding a rise in interest rates – whether it’s at the start of 2016 or the end.
“For businesses, they previously didn’t know what the rates would be from month to month – at least now they have some degree of certainty in the short term.”