Shorted-sighted Bank ups loan rate

4 November 1999

‘Shorted-sighted’ Bank ups loan rate

By FWi Staff

THE Bank of Englands Monetary Policy Committee decision to increase interest rates by 0.25% to 5.5% today (Thursday) has been attacked by the NFU as “narrow-minded and short-sighted.”

NFU president Ben Gill said the decision would directly cost British farmers £20 million a year.

But far worse, it could again inflate the value of Sterling, and so further cripple Britains competitive position, while encouraging a flood of cheap imports, he said.

“I cannot make it plain enough that Britains exorbitant rates compared to the rest of Europe and the corresponding strength of Sterling is perhaps the single greatest contributor to the current farming crisis.”

The decision to raise interest rates had been widely expected, although no statement was made to justify the decision.

The European Central Bank also met this morning, and made the surprise announcement that interest rates within the Eurozone would increase by 0.5% to 3%.

This narrows the gap between UK and European interest rates to 2.5%.

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