Clive Owen LLP

A majority of North East Shadow MPC members (six to two) voted for an increase in interest rates.

The MPC is a partnership between The Northern Echo and Clive Owen LLP, which considers the state of the region’s economy and gives experts from a variety of sectors the opportunity to argue their case for a shift, or hold, in the rate.

Nicola Bellerby, of Clive Owen LLP, was worried about businesses being adversely affected by increasing costs and supply problems.

“The big thing to come is the National Insurance rise and I think that will happen. There’s a double whammy on that because an employer has an increase of 1.25 percent on all of the staff’s national insurance as well as the staff, obviously, they have got their 1.25 percent increase as well. And then if those employers are paying dividends there’s another 1.25 percent. So that’s going to put a squeeze on the businesses that are already struggling to get parts, struggling to get machinery – everything’s going up in price like electricity.”

Nigel Freeman, of BTS Fabrications, said: “In regard to BTS the order book is healthy as we have seen here for three to four years so there’s plenty of work out there. There is definitely a squeeze on the margins due to the energy increase.”

Karl Pemberton, of Active Chartered Financial Planners, said: “By virtue of putting up a small amount just before Christmas, it strengthened the pound, it then meant overseas holdings were devalued on people’s portfolios and stock markets have taken a bit of a hit over the last six weeks. So, we’ve already seen the impact of what a small rise can do, and my fear is if they try and do it too quickly and it doesn’t have the desired effect it might have the opposite effect in denting people’s confidence.”

Martin Williamson, of Latimer Hinks, said: “At the moment we hope they (interest rate rises) are going to be measured and relatively small and, bearing in mind, we are starting from a low base, I don’t know whether there’s any cause to think immediately that the property market is going to be thrown into some sort of seizure or we are going to have problems. So, I think there’s room for mortgage rates to rise slightly without it having too adverse an impact on the property market.”

Jonathan Willett, of Attis Insurance, also flagged up financial pressures on particular sectors. He said: “One of the factors concerning clients in the construction side, now, is the abolishment of use of red diesel, which they are concerned about, from April 1. That’s going to have a massive effect on construction-related businesses and there are a lot of clients already saying they are going to have to add between 15 and 20 percent to some of their pricing.”

Chris Donabie, of Naylors Gavin Black said how the commercial property sector was faring was mixed. There was confidence and demand around growth in the industrial market which was likely to outstrip inflation in the next 12 months. But he cautioned: “Acting as we do for landlords and for occupiers – things like higher energy costs, general inflationary pressures – tenants don’t just pay rent, they pay service charges, utility costs: they all have a squeeze, and everyone’s got a mind’s eye on that at the moment.”

Paul Davison, of Serios Group, said it was dealing with facilities management organisations, plastic manufacturers and car manufacturers. “Everyone’s interested in reducing their carbon footprint and driving their energy costs down, which is helping us greatly.”

Graham Robb, of Recognition PR, who advocated for a bigger rise than .25%, said ‘we have got to get grip on inflation’, pointing out some food stuffs had increased in price by more than 20 percent. “We can’t have food in the shops going up at this level because the poor are hurt most.”

He added: “We can’t allow inflation to become the thief of your savings or steal or destroy jobs. If you have savings in the bank, if you have £50,000 savings, inflation at five percent going to take £2,500 off it.”