While not welcoming an increase in the cost of borrowing, EEF the manufacturers' organisation believes Britain’s manufacturers will understand that this may be the short-term price to pay for greater economic stability in the longer-term. It may also help to keep the eventual peak of the current cycle lower than it might otherwise have been.
EEF also hopes that, if the MPC sees the need to raise rates further in the future, it will move forward carefully and predictably.
Commenting on the rise, EEF Chief Economist, Steve Radley, said:
"While higher rates are not particularly welcome at such an early stage in recovery, manufacturers understand that this rise may help to preserve economic stability in the longer run. We urge the MPC to continue to move forward gradually, ignoring calls for shocks that would be damaging for confidence and could also send Sterling higher."