Views from North East business leaders on interest rate cut

The MPC is a partnership between The Northern Echo, Clive Owen LLP and Recognition PR, which considers the state of 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 interest rate.

Clive Owen

Nicola Bellerby partner at Clive Owen LLP said: “I am voting to leave the interest rate unchanged. Whilst there seems to have been a recent increase in business confidence, possibly due to easing inflation and sales growth, the change of Government and the recent announcement of a ‘black hole’ of £20bn in the country’s finances may erode this confidence. Inflation has fallen but remains stubborn in the services sector and so I vote to not reduce the interest rate yet.”

Active

Paul Gibson partner at Active Financial Planners said: “My vote is to hold rates. Most are demanding US rate cuts asap. Not because it’s the right thing to do but because the boom is running out of steam a little. UK is sticking out as likely to be slower, hence sterling creeping up.

Paul Gibson (Image: Active)

“Labour’s policies will take at least 12 months to actually take effect. So far it seems to be inflationary giveaways to civil servants offset by likely tax rises on “other” taxes. They will not raise the estimated value of tax from the proposed tax rises. People will change their behaviour in response to the announced changes to lower their tax bills. This always happens without fail in all of UK economic history and no one ever learns as they get wrapped up in political spin. So the net result will be inflation and higher borrowing. Although not the vote that many will agree, but interest rate cuts are probably not wise at this time.”

Constructing Excellence

Catriona Lingwood, Chief Executive at Constructing Excellence in the North East said: “I would vote to keep the base rate the same. The inflation rate is slightly better but too soon to determine whether this is sustainable.”

Premier Tech Aqua

Nick Pope, managing director of Premier Tech Aqua, said: “My view is we need to cut rates by 0.5%. We are now at target inflation, and we need to stimulate consumption and demand.”

FRP

Martin Pullin partner FRP Advisory said: “I would vote to keep the interest rate the same. It doesn’t appear that the government are going to have an interim budget and the economic data points to a continued hold for me at this time.”

Populus

Donna James, research director at Populus Select said: “This is not an easy decision as certain sectors with which we are involved are sluggish, but core inflationary pressures, not reflected in the CPI rate, are still present. My vote is for stability rather than boom/bust. I am still worried about inflationary pressures, most notably wages. Wage growth, excluding bonuses, between March and May 2024 was 5.7%. The expectation of many in work to be feeling the effects of the cost of living crisis is not being realised unless wages continue rising above the current inflation rate.”

Newsquest

David Coates of Newsquest said: “My vote would be to hold rates. Inflation remains stubbornly above target and while the trajectory is in the right downward direction, core inflation excluding energy costs was over 4% in the March figures. With a change in Government, I’d think the best policy is to hold rates and see how things play-out over the next couple of months before making any changes.”

Xsite

Tim Bailey, partner at Xsite Architecture said: “I'm going to maintain my position for the last two voting rounds and suggest a 0.25% reduction in rate. Inflation appears to have now stabilised substantially and some kick start in investment, probably aided by some of the early messaging from the new government, is key to an economic uptick over the remainder of the year.”

Recognition

Graham Robb senior partner at Recognition PR said: “I vote for a reduction of 0.25%. We have to be serious about growing the economy. The inflation work has now been done. However, we must avoid above inflation pay rises now.”