Clive Owen LLP

The North East Shadow MPC members were split this month between increasing interest rates and holding them. Inflation and the rate at which it is falling was at the forefront of members’ minds.

The MPC is a partnership between The Northern Echo, Clive Owen LLP and Recognition PR 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.

Tim Bailey, partner at Xsite Architecture said: “My vote for this meeting would be to hold the rate at 4.5%. Although stubborn, the inflation rate has fallen and should continue to reduce albeit more slowly than is desirable. A good outcome from the MPC would be a hold and an indication that the rate should remain steady for the rest of the year, providing a more stable backdrop to confident investment decisions. The only caveat to that would be if inflation remains stubborn then a slight increase to help nudge it downwards again would be important.”

John Young, deputy chairman, AV Dawson Limited, said: “I’d be voting for a further quarter point interest rate rise to combat inflation. Conversations with our own banks highlight base rate is forecast to hit 5.5% and remain at these levels for some time, finance costs are a cause of concern and may well lead to a deferral of certain projects.”

Nick Pope, managing director of Premier Tech Aqua, said: “I would vote to hold, as inflation seems to be on its way down, property price increases are stalling and we need to give time for the recent rises to take effect as people come out of fixed rate mortgages.”

Martyn Pullin, partner FRP Advisory said: “My feeling is that despite the rate rises, there is little sign that inflation is being brought under control.

“In the face of persistently high inflation, my vote would be for a 0.25pc increase. I had thought about voting for a 0.5pc rise but my concern would be this would be unexpected by the markets and may cause an issue generally. It may be helpful for the MPC (after announcing the 0.25pc rise) that we have not ruled out a 0.5pc rise is inflation does not begin to abate.”

Nicola Bellerby, partner at Clive Owen LLP said: “Despite mounting pressure on households from the rising cost of living it seems interest rates will need to rise again this week. I would say 0.5% rather than the anticipated 0.25%.

“The only alternative is to drive down wages but the tightness of the labour market at present, makes this unachievable.”

David Coates of Newsquest said: “My vote would be to hold rates. Inflation in the US is softening, thankfully. We should hold rates and wait and see.”

Fergus Laird, partner at property consultancy Naylors Gavin Black and president of the Commercial Property Network, voted to retain the current level of base interest, citing concerns that any further rise would disincentivise commercial property investment and increase the cost of funding projects and developments.

Graham Robb, senior partner at Recognition PR said: “I find myself going for a pause and evaluate. The thing that would stop me pausing is worrying that if we paused our pound would fall and that would import more inflation. But on balance I just lean towards a pause because there is a lot of pent up pain that hasn’t filtered through the system and might do the job of tempering inflation as it filters through.”