Unions welcome interest rate cut

Unions lined up to welcome the second interest rate reduction in three months when the Bank of England's Monetary Policy Committee (MPC) cut the rate by 0.25% to 5.5% last month.

TUC general secretary John Monks said: "This was the prudent decision. With no great inflationary pressures in the UK, and real dangers from fall out from the US economic downturn, this was the only sensible decision."

Bill Morris, general secretary of the T&G general union, said: "The decision is good all round for the economy."

MSF, the union for skilled and professional people, welcomed the decision but would have preferred a larger cut. The union's general secretary, Roger Lyons, said: "Thousands of manufacturing workers will be breathing a sigh of relief today as a result of the cut in the interest rate."

Later it emerged that the MPC voted 6-3 to cut interest rates by 0.25% with the three dissenters wanting a cut of 0.5%. Responding to this, John Edmonds, general secretary of the GMB general union, said: "This was very significant. Once a Bank of England bureaucrat decides we need to drive down interest rates, I think we can really say that the tide is turning."

Now there has been a cut in US interest rates, another reduction in the UK seems almost certain.