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Fiirms call for further rate cuts Firms call for further rate cuts
(30 minutes later)
Business leaders have called for more interest rate cuts just days after the Bank of England lowered the cost of borrowing to 5.25%.Business leaders have called for more interest rate cuts just days after the Bank of England lowered the cost of borrowing to 5.25%.
The British Chambers of Commerce also predicts economic growth could fall to 1.7% this year - lower than most City forecasts and Treasury estimates.The British Chambers of Commerce also predicts economic growth could fall to 1.7% this year - lower than most City forecasts and Treasury estimates.
It said firms have been badly hit by the credit crunch, consumer slowdown and a weaker demand for goods.It said firms have been badly hit by the credit crunch, consumer slowdown and a weaker demand for goods.
The Bank of England has said it has to balance growth with inflation.The Bank of England has said it has to balance growth with inflation.
Food pricesFood prices
On Thursday, the Bank of England rate-setting committee cut interest rates to 5.25% from 5.5%, but the BCC said it had not gone far enough.On Thursday, the Bank of England rate-setting committee cut interest rates to 5.25% from 5.5%, but the BCC said it had not gone far enough.
Its economic adviser David Kern said: "Threats to growth are much more acute now than risks of higher inflation, and we would have welcomed a bold UK move to 5%."Its economic adviser David Kern said: "Threats to growth are much more acute now than risks of higher inflation, and we would have welcomed a bold UK move to 5%."
Now it is calling for the Bank of England's monetary committee members to act quickly to avoid more damaging slowdown.Now it is calling for the Bank of England's monetary committee members to act quickly to avoid more damaging slowdown.
However, the committee has to consider inflation before decreasing rates further and it has warned inflation is likely to go up because of higher food prices and an increase in energy bills.However, the committee has to consider inflation before decreasing rates further and it has warned inflation is likely to go up because of higher food prices and an increase in energy bills.
Meanwhile, the Institute of Directors said although current trading has remained robust for most directors, the future looked less certain.
Its survey, due to be published later this week, will warn that investment optimism has "fallen off a cliff", according to a report in the Independent on Sunday.