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Interest rate hold bad for economy, says NFDA

The Bank of England has held interest rates at 5.5% after lowering the figure in December.

Sue Robinson, director of the RMIF’s national franchised dealers association, said: "By holding the interest rate at 5.5%, the Bank of England is putting the brakes on spending at a time when it needs to be encouraging consumer confidence.

"Retailers, including car dealers, have felt the crunch during the last few months, and although last year’s car sales figures were up, the outlook remains uncertain unless interest rates are brought down."

Robison believes businesses will feel the knock on effect of above-inflation rises in household costs for consumers as well as their need to pay off debts.

She added: "The interest rate must be reduced next month, or else we could see consumers shying away from big purchases in ever-increasing numbers, which would have a negative impact on the overall economy."

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