Britain's economy shows little sign of improving on lacklustre growth and it seems ''extraordinary'' that the Bank of England is considering raising interest rates, the British Chambers of Commerce said on Friday. Kate King reports.
The world's oldest toy store, Hamleys, in central London, has announced its top 10 toys for Christmas. If British businesses were granted a wish list, clarity might be the favourite this year. The UK's finance minister agrees the sooner there's certainty around Brexit - the quicker the economy can pick up. But right now the British Chamber of Commerce, says there's little sign of improvement. And it singles out the Bank of England - saying it's - quote - 'extraordinary' to be mulling a rate rise. So do they have a point? (SOUNDBITE) (English) JEREMY STRETCH, HEAD OF G10 FX STRATEGY, CIBC, SAYING: "I think they do. If you look at the underlying growth trajectory of the U.K. It still looks to be running near Point three quarter over quarter on a GDP basis than anything higher than that. And Point 3 is certainly subtrend now. Yes you can argue that inflation is potentially going to breach the top of the target band in next week but that's still a legacy of the the slide in Sterling we saw in the immediate aftermath of the Brexit vote." The BCC's own Quarterly Economic Survey of businesses, showed sales at services firms that make up the bulk of the economy were steady in Q3. But there was little pick-up in pay pressures or investment, both of which the BoE expects to rise markedly next year. (SOUNDBITE) (English) JEREMY STRETCH, HEAD OF G10 FX STRATEGY, CIBC, SAYING: "For the bank it probably makes sense to remind markets and particularly to remind consumers and borrowers that rates can go up but I'm not sure at this particular juncture that that gamble or that risk is worth taking So I think the bank will be best served to warn, yes, but to hold off at the very least until the early part of next year to see how the economy performs over the course of the next three months." A majority of economists polled by Reuters think the BoE will move at its next meeting in November - but most also said it would be a mistake to act now.