Mixed response to interest rates rise

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Mixed response to interest rates rise

LONDON, UK - The Bank of England's latest rise in interest rates has been met with a mixed response from the UK's business community.

The Bank decided today to raise rates by 0.25 per cent to four per cent, confident that the manufacturing sector has started its recovery.

The CBI reluctantly welcomed the rise, saying it hoped the move would prevent more aggressive action at a later date.

But British Chambers of Commerce (BCC) director general David Frost described the rate rise as "disappointing".

"This rise is premature and is likely to hit recovery over the head before it gains momentum," he said.

The TUC said the move was "premature" because the "Bank could have afforded to wait until it had confirmation that the expected recovery in manufacturing is actually happening".

EEF chief economist Steve Radley respected the Bank's move, saying: "Whilst manufacturers had not given the green light for an increase, they will understand this decision but hope the Bank continues to tread cautiously."

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