Cut interest rates to boost economy say car dealers

‘Continuing economic pressure on households has made consumers wary of making big purchases, so by deciding against an interest rate reduction the Bank of England has missed an opportunity to kick-start the economy,’ said Sue Robinson, Director of the RMI National Franchised Dealers Association (NFDA), which represents the UK’s new car dealers, commenting on car sales figures for August 2008, as well as today’s interest rate announcement by the Bank of England.

63,225 cars were sold in August, 18.6 per cent down on 2007.

Also today, the Bank of England announced that interest rates will hold at 5 per cent.

Robinson continues: 'The cost of borrowing remains high, while household costs continue to increase. The Bank of England has the ability to immediately boost the economy by reducing the interest rate, and would be wise to do so as soon as possible.’

Robinson adds: ‘A reduction in interest rates would help householders struggling with mortgage debt and other increasing household costs. Hopefully this would increase disposable income that could then help boost the wider economy.’