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Low interest rates 'will benefit businesses'

Date Added: 20/08/2010  

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A prolonged period of low interest rates could benefit firms taking business debt advice, experts have stated.

The Bank of England recently opted to keep interest rates at their historic low of 0.5 per cent, although minutes have revealed that one member of the Monetary Policy Committee (MPC) backed a slight increase in the cost of borrowing.

According to the British Chambers of Commerce, it is a good move to leave interest rates at their current level because many firms are under lots of financial pressure.

David Kern, chief economist at the organisation, has therefore urged the Bank of England to maintain the status quo for the next few months.

"Given the domestic and international dangers, we urge the MPC not to contemplate any interest rate rise until mid-2011 at the earliest," he stated.

This comes after Santander said keeping an eye on all upcoming economic data will be "crucial" for the MPC in the next few months, as it must decide how much longer it wants to "keep its foot right down on the accelerator".

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