Bosses call for rate cut; ECONOMY: Appeal for respite over slowdown fears.

Byline: By Jon Griffin

BUSINESS leaders across Birmingham are looking for early festive cheer with a cut in interest rates.

Bosses at Birmingham Chamber of Commerce and Industry are hoping Christmas comes early this week as the Bank of England's Monetary Policy Committee gathers for the final time in 2007.

BCI leaders say a fall in rates would bring much needed respite to the business community following a difficult year for all sectors.

Katie Teasdale, BCI policy adviser, said: "It is crucial the MPC considers the impact sustaining high interest rates into the New Year will have on the region's economy as businesses' fears regarding a dramatic slowdown next year heighten.

"A cut of 0.25 per cent would increase consumer and business confidence just in time for Christmas.

"A slow November, coupled with falling consumer confidence, is extremely worrying for the city's retailers.

"High street stores anticipate a price conscious festive period, with shoppers holding out for cheaper bargains.

"Manufacturers also expect further lost business as exchange rates remain uncompetitive, particularly against the US dollar.

"All sectors report concerns over a slowdown in investment intentions in current market conditions. We acknowledge that inflationary pressures remain a concern, particularly as CPI inflation reached 2.1 per cent in October and is now above the two per cent target set by the Government.

"As such, it is right that the MPC monitors these trends carefully. However, there are other factors, including the impact of interest rates upon businesses which are the driver of our economy, that should be taken into consideration.

"We strongly urge the MPC to acknowledge these difficulties and to act accordingly through committing to lower interest rates to support the firms which constitute the lifeblood of our economy."