One of the UK’s leading business experts has used a Hampshire Chamber dinner to call on the Bank of England to avoid raising interest rates too much, too fast.
Nora Senior, President of British Chambers of Commerce (BCC), said any rise needed to be gradual and paced because the economy was not yet seeing sufficient investment growth.
Too sudden a hike by the Bank’s Monetary Policy Committee would risk choking off the recovery, she said.
Ms Senior was addressing an audience of more than 30 board directors and other business executives at the Grand Harbour Hotel in Southampton.
She said: “Businesses will only invest if they see that the cost of borrowing is going to remain low or have only a gradual rather than sudden rise. The government hasn’t yet rebalanced the economy in favour of business investment or exports and that is having a knock-on effect on manufacturing and skills. The UK needs to invest in specialist skills. At present we still have to import digital and engineering skills because we have not sufficiently fostered these kinds of skills here at home. We must generate wealth in a balanced way and that means creating the conditions for long-term stable investment. Low interest rates are fundamental and that’s something we need to keep highlighting to the policymakers in government and at the Bank of England.”
Ahead of the dinner, Ms Senior met with three Hampshire Chamber business members: Knightsure Insurance Brokers, Condor Office Solutions and commercial property consultancy Lambert Smith Hampton.
Commenting on her local tour, she said: “I am struck by the wide diversity of industries and commercial services in Hampshire. There is a strong professional services sector here which is well placed to contribute to the very important export market in professional services in the UK generally. That activity is vital if we are to achieve an export-led recovery. There is a thriving tourism sector in Hampshire as well and there is clearly also a great deal of regeneration going on.”
Asked what priorities the government should be focusing on to support Hampshire companies, Ms Senior said more still needed to be done to reform business rates, adding: “We need to make the system much fairer and be bold enough to explore other solutions such as setting rates based on planning bands instead of rental values.”
Ms Senior’s hosts for the visit were Maureen Frost, Deputy Chief Executive of Hampshire Chamber, and Andrew Finney, President. Ms Frost said: “Nora Senior is a leading, campaigning voice for businesses across the UK and her insight across a range of issues was welcome and enlightening.”
A former businesswoman of the Year, Ms Senior was appointed BCC President in July 2013. She is also Executive Chair for UK Regions and Ireland of the global PR and public affairs consultancy, Weber Shandwick, having previously been Managing Director of Saatchi & Saatchi (North).
