Bank chief addresses economic challenges

Leading members of the business community in Suffolk came together to hear from a leading member of the Bank of England on the latest forecasts for UK

Phil Eckersley, the Bank of England’s Agent for the South East and East Anglia met with over 100 members of the Suffolk Chamber of Commerce at the Stoke by Nayland Hotel, Golf and Spa to deliver the August 2012 Inflation Report.

“There is no doubt that despite many businesses I meet working harder than ever there remains many challenges for the economy,” said Phil who has worked for the Bank of England for over 25 years. “The latest research shows that lending conditions facing households and companies has tightened further with the increased funding costs being experienced by banks.”

The August 2012 Inflation Report explains that business activity in the euro zone continues to be weak with output in the UK broadly flat over the last two years.

“I speak to many businesses who tell me that they feel much more positive than the research suggests,” Phil Eckersley continued. “It is important to recognise that there has been a gentle pick up in the growth of household incomes. We are also seeing job growth in the private sector increasing and with the newly announced Funding for Lending Scheme set up by Government and the Bank of England there is hope for a modest recovery.”

Infrastructure was an issue raised by members of the Suffolk Chamber of Commerce and by Phil Eckersley at the event as needing Government investment. Local businesses have continued to lobby over recent months over important infrastructure issue such as the A14 and the Great East Main Line. Despite positive noises coming from Whitehall it will take some time for that investment to be delivered.

“It was good to welcome Phil back to Suffolk and hear directly from the Bank of England about the challenges our local and regional economy faces,” said chief executive of Suffolk Chamber John Dugmore. “It was also good to hear that Phil’s experience is very similar to both the Chambers and our members. While the figures show we are well and truly in a double dip recession, the everyday feeling of business is more positive.”

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Last month, Suffolk Chamber heard from the British Chambers of Commerce Director General John Longworth who is speaking to HM Treasury and Chancellor Osborne on a regular basis about what business needs.

“As the voice of business in Suffolk we continue to back the need for business to access finance,” said John. “That’s why we are backing John Longworth and the national chamber calls for a Business Bank that would make a real difference.”

In a lighter moment at the end of the event, Phil Eckersley explained that the long period of low interest rates was not a first. “When we look back at the setting of interest rates many people think we are going through an unheard of period. Interestingly for over 100 years in c1600 rates stayed at or around 0%. There is some time to go before we reach that.” he said.