The Confederation of British Industry yesterday praised the Bank of England for not being pressured into a premature rate rise.
The employers' organisation said that the Monetary Policy Committee was right to take a balanced view of the conditions in different parts of the economy including the current stock market weakness and the continuing buoyancy in the housing market.
Ian McCafferty, CBI chief economic advisor, says: “This is the right decision, it is clear that there is little generalised inflationary pressure in the economy. Prices in the shops have been falling every month since January and are now back to the levels of May 1997. The Bank of England has kept its cool by refusing to be pressured into a premature rate rise because of the strength in the housing market, which only constitutes one part of the economy.”