Business Group: Britain Must Cut Interest Rates To Boost Demand

By Agence France-Presse Britain's principal business organization called for a swift cut in interest rates to revive firms after its latest survey showed plummeting demand. Manufacturing orders from within Britain dropped at the fastest rate in nearly four years, the Confederation of British Industry (CBI) said in its latest Quarterly Industrial Trends survey. A slump in consumer and manufacturer confidence, largely attributed to the Iraq war, had convinced the CBI that an interest rate cut was needed, it said. "Manufacturers hoped that domestic demand would hold up until there was a pick-up in global trade, but that does not seem to be happening," said Digby Jones, CBI director general. "The time has come for another cut in interest rates to see us through this difficult patch." The end of the Iraq war would "steady nerves," he said. "But the world's economic problems were there before the war and they are still there now." Of the 937 manufacturers taking part in the survey, 70% reported that there businesses were working below capacity, although this was a slight improvement on 74% seen in the previous report. Copyright Agence France-Presse, 2003