No interest rate change ‘good news' for hospitality

10 March 2011
No interest rate change ‘good news' for hospitality

The Bank of England's Monetary Policy Committee has voted to hold interest rates at 0.5%, despite calls that it should go up to combat rising inflation.

The rate has now been held at the same level for two years. There have been increasing expectations of a rate rise, following news that the Consumer Prices Index measure of inflation hit 4% - twice the Bank of England's target rate - last month.

Commenting on the news, Paul Hemming, partner and head of corporate finance at corporate advisory firm Zolfo Cooper said: "The decision by the Bank of England to hold interest rates is good news for the leisure sector.

"While on-going inflationary pressure is a concern, most of this pressure stems from beyond the UK, and a move to increase the bank rate at this time would further dampen consumer spending - damaging the recovery - at a time when our research through the Leisure Wallet Report shows that consumers are already significantly tightening their belts, especially when it comes to what they spend on leisure activities, such as eating out."

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By Neil Gerrard

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