CBI Wants Interest Rate Cut

The CBi has called for an interest rate from the Bank of England It wants it to cut its benchmark interest rate to 4.5% in November and then 4% early next year, to boost the UK's flagging economy.

This echos calls from many in the Property and Construction industry who want a cut in rates coupled with the major lenders making mortgages more accessible and affordable.

The CBI suggested that the UK was already in “mild recession”, and has forecast that the economy will contract 0.2% in the third quarter of this year and 0.1% the following quarter.
They have also forecast a rise in the unemployment rate next year to 6.5%, the highest level for 17 years, with a total 2.01 million people out of work.

Richard Lambert, director-general of the CBI, said: “Growth in 2009 will be feeble at best. Having experienced a rapid loss of momentum in the economy over the first half of 2008, the UK may have entered a mild recession...The Bank should have leeway to cut interest rates and, as inflation falls, we should be well placed to move beyond this difficult stage in the business cycle. If all goes well there should be room for a half point cut in November to help restore confidence in the beleaguered economy."