date: 6 August 2008

embargo: 12.00 hrs 6 August 2008

Bank of England must prioritise growth and cut interest rates, says TUC

The TUC is calling on the Bank of England to cut interest rates when its Monetary Policy Committee (MPC) meets tomorrow (Thursday).

TUC Head of Economics and Social Affairs Adam Lent said: 'The Bank of England must take bold action and cut interest rates decisively.

'The choices made by key decision makers over the next few weeks will determine the depth of economic trouble we will face in 2009. This is why the Bank must prioritise economic growth now rather than waiting until the economy has stalled.

'The current concern of the Bank is to prevent 'inflationary expectations' getting out of control by holding or even raising rates. But it is crystal clear from recent surveys that it is actually the expectation of a recession that is spiralling and which threatens to push the UK into even deeper problems. A rate hold will only reinforce this perception of impending recession and a rise will send it off the scale.

'The MPC is now facing its greatest test: is it flexible enough to meet changing circumstances or is it so rigidly defined that it risks becoming a source of economic problems?'

NOTES TO EDITORS:

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Contacts:

Media enquiries:
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Brenchley T: 020 7467 1337 M: 07900 910624 E: ebrenchley@tuc.org.uk

Press release (400 words) issued 6 Aug 2008