CALLS for a rise in interest rates have gained traction among members of the North East Shadow MPC, with two members voting for an increase at the committee’s December meeting.

A partnership between The Northern Echo, the North East Chamber of Commerce (NECC), and V&A Vigar & Co (Darlington) LLP, the North East Shadow MPC looks at the region’s economy and gives experts from a variety of sectors the opportunity to argue their case for a shift, or hold, in the rate.

Institute of Director North East Chairman Graham Robb and Ajay Jagota of www.kis.co.uk, voted for a 0.25 per cent increase in the base rate.

Amanda Vigar, managing partner at V&A Vigar & Co said: “The ever concerning news from the Eurozone means that the UK should be sending out signals of stability to both the British and the world economy. Also, with the uncertainty of a general election next year, a further period of certainty for business in terms of base rate is critical for the confidence of businesses.”

Nigel Mills, chairman of the Entrepreneurs’ Forum, said: “Our latest survey of members shows sales are up, profitability is up and people are still confident of the future, but that confidence is lower than it has been.

“Consumers are more and more demanding in terms of what they want and value for money, but as long as you deliver that value for money and maintain your levels of service, they are prepared to spend.”

Ross Smith, policy director at the NECC, said: “There is no sense that we are heading back to the dark years. We are just seeing that growth slow in the short term.”

Signalling time for a rate increase, Mr Jagota said: “I think the markets have factored in a rate rise and other countries realise there is going to be a rate rise. A small percentage rise would clear the air and say that we can now get on with it.”

Mr Robb said: “There are vast numbers of people who are not getting returns on their interest rates on their savings. Some people will spend or invest, but if you are a pensioner, that’s not going to happen.”

Mr Mills said: “If you start to put interest rates up, you are going to hurt UK industry.”

Anne Elliott, Partner at Latimer Hinks Solicitors, said: “The coming Election is going to have an impact. People are holding off now. I think the slight downward trend might continue.”

Hirohito Imakoji, of Liebherr-Sunderland Works Ltd said there were pressures on cost and that businesses had to find a balance between that and ensuring employees were retained.

The committee also voted for a hold in the level of Quantitative Easing.