Manufacturers reluctantly accept rate rise
EEF, the manufacturer' s organisation accepted today' s decision to raise interest rates on the basis of longer term economic stability but reiterated its concerns about the potential impact on the exchange rate, particularly the dollar.
EEF believes that whilst the picture for manufacturing is undoubtedly improving, the strength of the upturn remains uncertain, especially as the full effects of the dollar' s weakness have yet to feed through and there are limited signs of recovery in the eurozone
EEF Chief Economist, Steve Radley, said:
"Whilst manufacturers had not given the green light for an increase, they will understand this decision but hope the Bank continues to tread cautiously. If higher rates translate into a strengthening of the pound, particularly against the dollar, this will take the steam out of any recovery in output and investment. Companies will hope this increase does not fuel further expectations of higher rates in the short term."