THERE will be interest rate rises this year, but now is not the time.

That was the majority view of the North-East Shadow Monetary Policy (MPC) Committee at its latest meeting.

With a couple of dissenting voices, members voted to hold interest rates at their current 0.5 per cent in March.

A partnership between The Northern Echo, the North-East England Chamber of Commerce and Darlington Building Society, the MPC considers the state of the region’s economy and gives experts from a variety of sectors the opportunity to argue their case for a shift, or hold, in the rate.

Chairman of the committee and finance director at Darlington Building Society, Christopher White, voted for a hold. 

He said: “The Chancellor was upbeat in his Spring Statement about the UK economy and that we are at a turning point with growth expectations for 2018 being increased.

"However, the increases were small and the UK’s growth is still expected to be the slowest in the G20.

"The economy feels fragile and not ready for a bank base rate increase.

"Inflation, however, remains high and therefore an increase is probably ahead of us in the coming months which will be good news for savers”.

Ross Smith, director of policy at the North-East England Chamber of Commerce, said: “With recent relatively good news on the economy, the Bank will have scope to raise rates at least once more this year.

"This will also be important to ensure there is some room for manoeuvre to offset any initial shocks at the point of Brexit.

“However, growth remains relatively muted, and with inflation expected to have peaked, there is no need to do so just yet.”

James Robson, chairman of the Gateshead-based Entrepreneurs’ Forum, said: “My vote would be for no change to interest rates at the moment.

"The housing market is getting back to normal with mortgages being available to younger buyers so any change in rates could affect this.

"Businesses are holding off investments already due to Brexit uncertainty, so a rate rise would put further dampening on investment plans.

“Smaller savers still have some good rates available via cash ISA’s where limits have been lifted again.

"Sophisticated savers use other products like VCT’s to achieve acceptable returns.”

Gary Ellis, partner at Clive Owen LLP, said: “I would leave the interest rates as they are for now.

"There are too many uncertainties in a delicate economic balance at the moment.

"Rises will come but, in my opinion, not just yet.”

Nick Pope, financial director at furniture maker Godfrey Syrett, which makes goods in a factory at Langley Moor, near Durham City, said: “For now, I would recommend they remain as is following the recent change last year.

"For the simple reason that having gone so long at so low, I do not think now is the time to push an aggressive continuous increase.

"We have not had enough time to assess the impact of the recent rise and whether it has slowed down or curbed inflation long term, although it is arguable that even a series of rise will not be seen from an impact perspective for a while.

"I do not see a small rise however as having a major hit on business as for me, continued interest rate movement and uncertainty on Brexit is a greater worry.”

David Coates, managing director of Newsquest Yorkshire and North-East, which publishes The Northern Echo, said: “I vote to leave interest rates unchanged.

"There’s still too much uncertainty to consider a change at this time.”

Karl Pemberton, managing director at Active Chartered Financial Planners, said: “My vote would be to hold rates as they are.

"There’s been little change in the markets since the last vote and I can see no compelling reason to change the course of interest rates.

"It is only a matter of months since we saw rates increase from 0.25 per cent to 0.5 per cent, and while I do think they should rise further over the long-term, I believe it needs to be done gradually over many years.

"Any significant rises over a shorter period, while it may benefit the economy, would only harm borrowers who need time to adjust to any increases in costs."

Chris McDonald, chief executive of the Materials Processing Institute, said: “The recent growth forecasts announced in the Chancellor’s Spring Statement are not significant, which highlights the need for more stability.

"Manufacturing output is continuing to rise, albeit at a slower rate of growth, and this together with the uncertain impact of Brexit suggests that a hold is necessary at this time.

"Businesses and industry need assurances and the confidence to invest, which will continue to support and drive forward the recent, resurging productivity gains that the UK needs for future economic prosperity.”

Nicola Neilson, of Darlington-based Latimer Hinks Solicitors, said: “I would vote to hold rates at the current levels at the moment.

"While I foresee a further rise at some point this year, I want to see a longer period of stability.

"As I mentioned at the last Shadow MPC meeting, at Latimer Hinks we have seen a good level of instructions in relation to mortgages over the last 12 months and I would hope that would continue.

"I read a report recently that suggested a one per cent rate rise would impact on the London market by adding up to £147 per month to mortgage payments.

"Clearly, the impact in the North-East would be less significant, but in relative terms there would be an impact.

"At a time when there appears to be more confidence, to the point that borrowing is going well, I believe another rate rise now might cause borrowing to slow down and that would impact on the property market.

"Certainly, if the report is to be believed, the impact in London might be significant and I would tend to think that the rise won’t, therefore, be forthcoming this month.”

Graham Robb, senior partner at Recognition PR, said: “With inflation at three per cent I would vote for a small rise in March to curb any possible inflationary pressures over the coming months.

"This would also benefit savers who have experienced very low interest rates for a long time.”

Ajay Jagota, chief executive of KIS Group, said: “I vote to raise interest rates by 0.5 per cent.

"The economy is in better shape than many predictions and it’s time to take this opportunity to get interest rates back to normality.

"We should get back to fiscal prudence of controlling inflation and it gives options in case there is a need to cut rates in the future.”

Catriona Lingwood, chief executive at Constructing Excellence in the North-East, said: “The recent volatility in the stock market has underlined the likelihood of further interest rate rises this year, which will inevitably impact on the private construction sector.

"The swings in the stock market in early February reflected that rising wages and prices would put pressure on interest rates.

“The prospect of rising interest rates has already taken its toll on housebuilders’ share prices which are down between ten per cent and 15 per cent this year.

"The market worries that rising mortgage rates will slow sales in the months ahead.

“I would vote to retain interest rates at their present rate for this month. Looking at a possible rise in a month or two.”

Jonathan Willett, director of Stockton-based Henderson Insurance Brokers, added: “I vote to leave the interest rate as it is following the recent small increase.

"The reason for this is that confidence remains low and there appears to be a lot of uncertainty around Brexit still so a further increase would not be justified at this moment in time."