Business leaders in Birmingham unanimously agree interest rates will be held – but are calling for a cut in National Insurance payments to help firms to keep the economy on its tentative upward trend.
Institute of Directors West Midlands chairman Richard Boot said the Bank of England has done its bit – now the Government needs to take action in order to keep the recovery alive.
Speaking ahead of the latest BoE rates decision on Thursday, he said the Bank’s scope for action was limited but urged the Government to look at reducing the impact of employers’ National Insurance payments.
He said: “This would make it easier for firms to make new jobs available and so reduce unemployment levels.”
Birmingham and Solihull Chamber of Commerce and Industry anticipates that interest rates will stay at 0.5 per cent and that the one-year-old quantitative easing programme will also remain the same.
President Paul Bassi said: “Owing to a spate of better than expected data from the Manufacturing Purchasing Managers’ Index, the growth of GDP to 0.3 per cent and strong export figures, the economy has shown a small improvement.
“It is crucial that the government maintains this fragile recovery by continuing to encourage economic activity. In the last few months we have seen temporary VAT cuts, the car scrappage scheme, which will finish at the end of March, and public spending brought forward in an attempt to beat the recession.
“BCI is urging businesses to sign up on-line to a major petition launched by British Chambers of Commerce to reverse the one per cent employer NI increase planned for April 2011 which is a clear ‘tax on jobs’.
“While the Bank of England Monetary Policy Committee (MPC) maintains its status quo, more needs to be done to feed the tender shoots of investment by increasing access to funding.”