North-South divide brings plea for caution over rates

The committee voted unanimously for interest rates to remain on hold and for no further quantitative easing.

The Shadow MPC is a partnership between the Yorkshire Post and the law firm Lupton Fawcett Denison Till.

Significant falls in unemployment and consistently upbeat data on the economy has raised expectations that the Bank of England could make a move on interest rates earlier than previously expected.

The real MPC is due to announce its latest decision on Thursday but its Yorkshire shadow warned against action this month.

Kevin O’Connor, of Baker Tilly said: “It’s fair to say there is a North-South divide. I think that that’s definitely evident.”

And there was debate about whether all parts of society are yet feeling the benefits of the economic upturn.

Nimble Thompson, of construction firm NG Bailey Ltd, said: “In business now, there is a better feeling. I’m not sure the chap on the street has that better feeling.

“It’s a difficult message saying that things are getting better when the chap on the street isn’t seeing things getting better.”

Business leaders around the table agreed there were genuinely positive signs.

Alex McWhirter, of Finance Yorkshire, said: “We are seeing good recovery in manufacturing and in engineering. It’s pretty healthy.

“There’s a bit of a slowdown in creative and digital, but we expect that to come back fairly quickly.

“Generally, things are healthy. The commitment of people to grow businesses is pretty strong. People have been sitting on their hands for so long and sitting on capital.

“They are getting to the point where they are investing.”

Bank of England governor Mark Carney has previously said that interest rates would remain on hold until unemployment reached seven per cent.

Faster than expected falls in the jobless totals have taken the figures close to that target but there was scepticism among Shadow MPC members about the reality behind the numbers.

Bill Adams, from the TUC, said: “The employment figures don’t tell the real story at all. I think they’re skewed.

“There are thousands of people on short-term hours or zero hours contracts, particularly under-24s.

“Wages have gone down people don’t have the money to pick up the products or services.”

If the Bank of England’s Monetary Policy Committee leaves the base rate unchanged in Thursday it will mean it has remained at its record low of 0.5 per cent for five years.

Despite the upturn in the economy, most analysts continue to forecast interest rates will remain unchanged for many months to come.