 |
 |
||||||
[February 2004]
Construction Products Association Urges Caution on Interest Rate Rises
Commenting on the Bank of England's decision to raise UK interest rates by 0.25%, Allan Wilen, the Economics Director of the Construction Products Association, said on 5 February 2004: "Whilst we understand the decision taken today by the Monetary Policy Committee to raise rates, we would caution against any further increase in the near term.
"Consumer borrowing, and in particular re-mortgaging activity, has grown rapidly over the last three years and has been a key factor in sustaining UK economic growth. Despite the recent spike in house price inflation there are clear signs that households are becoming increasingly cautious of taking on further borrowing. Too rapid a rise in interest rates could prompt a sharp deterioration in consumer confidence, the housing market and economic growth.
"Furthermore, higher rates would hamper the recovery in UK manufacturing by adding to investment costs and putting further upward pressure on Sterling."
ENDS