Rates ‘no change’ right call, says IoD

Today’s decision by the Bank of England to leave interest rates at 4.75% was the right one, the Institute of Directors (IoD) said.

Graeme Leach, Chief Economist at the IoD said:

“The key question is whether the softening in economic activity now underway, is sufficient to trigger a reduction in interest rates over the summer. Our view is that interest rates will stay at 4.75% at least until the Autumn. There is a broad based slowdown underway - across both manufacturing and service sectors - but it is still too early to gauge how far and how deep this is. We expect to see interest rates unchanged in July and August, but thereafter, the probability of a quarter point cut is increasing.”