Interest Rate Hold-Off Good For Economy Says NFDA

‘The Bank of England has made the right choice in holding the interest rate at its present level,’ said Sue Robinson, director of the RMI National Franchised Dealers Association (NFDA), a part of the Retail Motor Industry Federation.

The Bank of England announced earlier today (Thursday 2 August 2007) that it would hold interest rates at 5.75 per cent. The rate was increased last month.

Robinson continues: ‘This will allow previous interest rate rises to feed through the economy. Interest rates have been put up five times since August 2006.’

‘Car sales have fluctuated this year. More stable economic conditions could encourage consumer confidence.

‘Consumers face rising costs following previous interest rate rises, above-inflation rises in household costs, including council tax bills, as well as the need to pay off debt. All of these costs are impacting on consumer spending, which has a knock-on effect on business,’ said Robinson

Robinson adds: ‘By allowing a period of reflection to measure the impact of these rises on the economy, the Bank of England is giving consumer confidence the chance to recover.’