Call for Bank to freeze rates

THE BRITISH Chambers of Commerce today urged the Bank of England not to raise interest rates until at least August, warning that confidence among manufacturers and service sector firms is sliding.

In its latest survey of more than 5,000 companies, the BCC found domestic sales fell in the first quarter to their lowest since mid-2003.

A net 14% of manufacturers said sales had risen over the past three months against 16% in the previous quarter. A net 23% of service sector firms reported higher sales compared with 29% in the last survey.

Confidence about turnover and profitability have fallen after picking up at the end of last year. On a brighter note, manufacturing export sales and hiring intentions improved, although export orders were down.

BCC director-general David Frost said the findings backed its prediction that the economy would expand by 2.5% this year, against Gordon Brown's 3% to 3.5% forecast.

Frost said: 'It is clear the economy is slowing and the business environment is becoming riskier and more difficult. The monetary policy committee should not consider interest rate increases until August at the earliest.'