Interest rates ‘on hold until 2015’

Business leaders in Coventry and Warwickshire believe interest rates could remain at their record low until 2015.

The Bank of England’s Monetary Policy Committee (MPC) meets on Thursday to set rates and to decide whether further quantitative easing should be pumped into the economy.

The Coventry and Warwickshire Chamber of Commerce expects rates to remain at 0.5 per cent has called for more to be done to get finance to businesses on the back of figures that say lending to firms is contracting.

Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “The forecasts made by the British Chambers of Commerce suggest interest rates could be at 0.5 per cent until the first quarter of 2015 and will only get back to one per cent by the end of that year.

“Low rates are a must at this time when we are trying to build a sustainable economic recovery but we continue to press the case for businesses to have greater to access finance to help them grow.

“Only this week, we have seen figures that say lending to business has contracted when it should be increasing.

“The principle behind the Government’s Funding for Lending scheme was welcome but, having been in place for nearly a year, it doesn’t appear to be having the desired effect for companies.

“Nationally, we want to see the promise of a Business Bank delivered with the scale and infrastructure required to make a telling difference on this issue.

“Locally, we are working with the Local Enterprise Partnership (LEP) in a bid to help SMEs in this region look at how they access finance from a variety of sources.”