November 08, 2006 08:50 ET

Union warns of setback for manufacturing if rates rise

LONDON, UNITED KINGDOM--(CCNMatthews - Nov. 08, 2006) - Amicus has warned of the effects of an interest rate increase on the manufacturing sector in anticipation of a one quarter per cent rise in the interest rate tomorrow.

Earlier this year government talked up the slight recovery that was shown in manufacturing results and business confidence. However, most recent statistics indicate that the optimism has declined and the growth rate slowed.

Amicus is concerned that the Bank of England is using short-term inflation expectations as the justification for a further rate hike. It argues that the August rate hike was unnecessary and that a further rise is certainly unnecessary in November. Furthermore, the Bank should stand ready to cut rates not increase them, in response to easing energy prices and declining global economic activity.

Amicus' Director of Research, Roger Jeary, commented:

"We can ill afford to fuel the decline in manufacturing jobs and increased unemployment on the back of an unnecessary rise in interest rates. Recent figures show that neither fuel prices nor wage increases have created inflationary pressures. If the MPC decide to increase the rate tomorrow then the likelihood is that much needed investment in manufacturing will be cut back and UK jobs put at risk."

Contact Information

  • Amicus Press Office
    Catherine Bithell
    Tel: 020 7 420 8909
    Mobile: 07958 473 224