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SCC COMMENTS ON INTEREST RATE CUT

Commenting on today’s decision by the Bank of England’s Monetary Policy Committee to cut interest rates by 0.5% to 1%, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

“This is the correct decision from the Bank of England in order to tackle the potential threat of deflation in our economy. However we must all now recognise that the usefulness of an interest rate reduction as a tool to provide an economic stimulus has become diminished.

“The key blockage affecting the Scottish economy at the moment is the availability and cost of credit to our businesses, and these must be tackled effectively if we are to chart a route towards economic recovery. This week’s announcement of new lines of credit from RBS and Nat West is another step forward towards addressing this but there remains a long way to go before a normal pattern of lending is resumed. It is in this area that the UK Government must continue to focus its energies in order to ensure that our economy turns the corner sooner rather than later.”

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