Clive Owen LLP

Despite economic figures showing rising inflation, contracting GDP and fuel and energy costs spiralling the Yorkshire Shadow MPC found some positives to share, particularly in relation to the City of York.

The majority of members did vote to increase interest rates this month with inflation top of the agenda. However, a couple of members were concerned about the effects that this would have and preferred to err on the side of caution and keep rates as they are for a little longer.

The MPC is a partnership between Clive Owen LLP and the York Press, 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.

Rob Whitehead, of Clive Owen LLP, was in favour of a rise in interest rates: “I think if we are following monetary policy then we’ve got to raise interest rates to check inflation, so we’ve got no choice really.”

Gary Smith, of Tilney, voted to raise interest rates: “If we don’t and the US raises interest rates the pound will fall, and we will import more inflation because the pound will fall against the dollar.”

Richard Peak, of Helmsley Group, also wants a small increase: “I think really it is a question of whether it’s a quarter or half a point. Personally, I would probably bite the bullet grasp the nettle and go hard quicker rather than delaying the inevitable.”

Steve Lowe, of Newsquest, said: “If you walk on the high street particularly in York it’s never been busier in my time, the high street and tourism and if you look at the hotel prices, they are up quite dramatically on two years ago and are taking full advantage of people with disposable income, so people are spending.

Steve voted to raise interest rates. He said: “We’ve got to get inflation under control it’s as simple as that it’s getting worryingly high.”

Dr Bob Gammie of York Business School said: “From my own sector we find that the university applications are up 50% this year compared to what it was last year, business school up 67%. The biggest issue we have is we can’t find accommodation for students. We’ve got a huge demand for what we’re offering but we can’t find enough rooms in the York area.”

He added: “I think inflation is out of control. I think we need to send the right message as well; we need to make sure we are doing everything we possibly can to get it back under control. The only mechanism we really have for that at the moment is interest rates, so we need to put them up.”

Kerry Hope, of Castle Recruitment, said keeping interest rates as they are is the best option at the moment: “I guess probably not thinking at the same in terms of the bigger picture, just seeing the local squeeze with everybody already struggling with finances and what that might mean to individuals rather than the big picture.”

Dave Broadbent, of Begbies Traynor, was also concerned about possible effects of an interest rate rise, he said: “I completely take on board what the members are saying but I just think that it is going to have a huge impact having so much more out there that is interest-only led, and I think even half a percent interest increase is going to have a big impact. So, part of me is just thinking we know that inflation is going to go up, we know costs of living are going to increase. I am a bit more cautious which is very rare for an insolvency practitioner, but I would be more likely to say see how it goes for the next couple of months first and then back end of the year look at increasing at that point. I think it might be a little too soon now however the last Bank of England discussion I was on I know that they are talking about increasing it certainly by October.”

ENDS