BCC warns Bank against high rates

The Bank of England has come under pressure from the British Chambers of Commerce (BCC) today, as the group calls for interest rates to be lowered.

The Bank of England has come under pressure from the British Chambers of Commerce (BCC) today, as the group calls for interest rates to be lowered.

The organisation called for the Bank to reduce the base rate in order to minimise the chance of unemployment reaching two million in the next 18 months to two years.

Speculating on the high chance of recession hitting the UK, the BCC announced that UK growth is likely to be negative or zero for the next three financial quarters, prompting many to fear high job losses in all sectors.

"But the bigger danger of a major UK recession can and must be prevented," the BCC report states.

The group stated that a reduction in interest rates would stave off a recession and curb unemployment, which could grow by between 250,000 and 300,000 in the next two years.

"If [the Bank of England's Monetary Policy Committee] decides not to cut rates in the next three to six months, growth prospects would be worse," it stated.

The new unemployment figures would bring the total to over two million for the first time since Labour came to power in 1997, acting as a damning blow to prime minister Gordon Brown's leadership.