Clive Owen LLP

The North East Shadow MPC was split this month with some members preferring a precautionary hold with the prospect of a recession, while others were concerned with the ongoing inflation and voted for a rise.

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 interest rate.

Nicola Bellerby, tax partner at Clive Owen LLP said: “I believe we need to see certain signs that our domestic inflationary pressures are reducing before stopping the interest rate rises. However, in order to delay the housing crisis until Spring 2023 and the inevitable pain that will bring, a 0.5% rise this week would seem to me to be the best option.”

Chris McDonald, chief executive officer, Materials Processing Institute said: “Unsurprisingly it is another vote for an increase from me. I remain concerned about the forward inflation projection and particularly the need to act early to avoid rates rising even higher in the future. I would support another 0.5% increase.”

Nick Pope, managing director of Premier Tech Aqua, said: “For this one I would hold rates, due to the last increase being significant and we need to wait to see it take effect.”

Alistair McLeod, chief executive of Gray Fox Consulting said: “I think we need to keep interest rates the same. The economy is now in recession, and we haven’t yet seen the impact of recent rate rises. I think if there are to be any further interventions to get inflation under control they need to come from government.”

Tim Bailey, partner at Xsite Architecture said: “I predict 0.25% rise in base rate. Inflationary concerns continue to require action to stabilise. While a rate rise might have some impact on investment decisions, and that might be true in construction/development particularly, the effects of inflation are more problematic generally and within the sector.”

Paul Gibson, director of Active Financial Planners said: “With real wages down, borrowing costs up, taxes at the highest level since the 40s, inflation is rampant. This is all a ripe mix for a recession into the early part of next year and therefore reduced demand for goods and services from the UK population. This should push down inflation in the future, it should reduce borrowing levels and it may tempt workers into the workforce or to up their hours.

“Much as I would love lower interest rates to help businesses and families out during the above period of adjustment, there does seem to be no way round it. Either inflation remains at double digits for many years or interest rates keep rising to the 4.5-5% mark over the next few months. Both hurt, however there is more control if we take the interest rate option.

“Sorry its gloomy but I don’t think there is any point trying to gloss this over, interest rates need to rise.”

Chris Donabie MRICS, SIOR, Partner, Naylors Gavin Black, said: “My vote is to leave interest rates where they are. The outlook is better for lowering inflation into later 2023 and 2024 and this should reduce the need for continued interest rate rises

“In any case, energy costs – especially for businesses and lower income households – won’t be controlled by further interest rates rises and all it is doing is compounding the problem and will push people and firms over the edge.

“Consumer spending is already going to be down next year and further rates rises will only exacerbate the issue and could leave empty shops on our high streets. The knock on is then less business rate tax being paid.

“I note that property stocks have risen recently which is a signals an expectation that rates rises may be slowing, which can only be a good sign in my opinion.”

Graham Robb, senior partner at Recognition PR, said: “One last dose of monetary medicine is required. I’d like to see rates rise to 3.5% then left for a few months to let them do their job of squeezing inflation.”