11 July 2008
The Bank of England has been urged to consider cutting the base rate of interest later this year. Commenting on yesterday's announcement by the Bank's monetary policy committee (MPC) that the interest rate is to stay at 5%, the Royal Institution of Chartered Surveyors (Rics) has suggested that a cut later this year would help consumer confidence. Rics chief economist Simon Rubinsohn stated that the MPC's decision of a hold vote this month is "understandable", but added: "The deterioration in both business and consumer sentiment will justify an easing in policy later in the year." However, consumers suffering from the rise inflation due to energy bills and food are unlikely to see pressures easing in the near future. "There is at this stage very little evidence of second round effects from the jump in food and energy costs," he said. Earlier this week the Times reported that Centrica plans to increase energy costs for British Gas customers.
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