Vehicle spending ‘on hold with interest rate’

Putting the base rate level of interest on hold this month also slows down the amount people are spending on cars, it has been claimed.

The Bank of England today announced that it would hold the level at 5.5 per cent, after a reduction last month buoyed consumer confidence.

According to the RMI’s National Franchised Dealers Association (NFDA), the outlook for the industry is "uncertain" while the rate does not decrease.

Sue Robinson, director of the NFDA, commented that people may simply be forced to spend their money on other things.

"Consumers face rising costs following previous interest rate rises, above-inflation rises in household costs, including council tax bills, as well as the need to pay off debt," she said.

The monetary policy committee of the Bank of England convenes every month to decide the base rate.

One of Gordon Brown’s first acts as Chancellor of the Exchequer was to give the group this power.


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