Rate Rise May Undermine Manufacturing

11.48.59am GMT Wed 5th Nov 2003

Reacting to this morning's index of production showing manufacturing output lower than a year ago Vince Cable MP, Liberal Democrat Shadow Chancellor, said: "Britain currently has the twin problems of runaway consumer spending and debt built on housing market bubble, and a weak manufacturing sector."

"An interest rate rise may well help prick the house price bubble but undermine the recovery in manufacturing."

"The Chancellor needs to have more than his current one policy to deal with the problems of the economy - in particular the Government needs to have policies to reign in irresponsible lending by banks."

ENDS

Note to editors

1. Manufacturing output in the latest 3 months is 0.4% down on the same period a year ago, and down 0.2% on the month.

2. Manufacturing output is now 5% below 2000 levels.