Low interest rates ‘an essential move’

Interest rates must stay low, an economist has said.

Charles Davis from the centre for economics and business research said such a move is important to help the UK economy recover, with any rise in these being likely to “squeeze” the private sector.

He argued that the UK has seen a worse recession than other countries in Europe partly due to consumers having more debt, with spending being reigned in as people look to lower the amount they borrow.

Having low interest rates may help people to keep down the amount they owe, by holding down the cost of loans and credit cards.

Recent data has demonstrated that Britain’s economy is performing worse than nations such as the US, Germany, France and Italy, which are all now seeing economic expansion.

While Britain’s gross domestic product fell in the third quarter of this year by 0.3 per cent, figures from Eurostat showed that both the eurozone and the European Union as a whole are now out of recession.

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