Partner Article

Rates the biggest headache for NE firms

North East businesses have identified fears over future interest rate rises as the prime barrier to future growth. The region’s economy continues to be robust in the face of more turbulent economic conditions, according to the latest North East Business Barometer. The survey, published this week by the North East Chamber of Commerce, also shows that trade abroad took a hit in the last quarter.

Andrew Sugden, NECC director of membership and policy, said: “On the whole, the North East economy is still trading well. We are seeing some tightening of belts but employment levels are good and predictions on future turnover are strong.”

Employment over the third quarter of 2007 was particularly robust - rising up 7% on the previous quarter. Expectations for the next quarter, though, have dampened. Investment in plant and training both continue to grow but at a reduced level.

When asked about barriers to business, many respondents were bullish in their outlook refusing to let issues such as staffing, red tape and crime to be a problem. However, the runaway issue for those surveyed was concern over interest rates with nearly two-thirds of respondents identifying it as the issue that is more of concern now than three months ago.

Mr Sugden said: “We have had five interest rate rises in the past year as well as the pressure of the credit crisis. We have yet to see that reflected in price inflation but clearly it is on the mind of many businesses. In the wake of the credit crunch the Bank must consider rate cuts before the end of the year.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .