CBI calls for interest rate cut to boost firms after 11 September

The
CBI has again called for a half-point cut in interest rates after its latest
survey highlighted the deepening economic crisis following the US terrorist
attacks.

The
findings of the new Mori poll of 250 top executives shows just how deep the
wounds of 11 September are proving to be for British business.

More
than 60 per cent of those questioned admit that the attacks have damaged their
firm’s business prospects, with 52 per cent of those citing prospects as
slightly worse and 11 per cent saying they are much worse.

A
third of companies expect a serious impact on demand and 29 per cent said that
a significant number of orders have already been cancelled.

However,
firms are reacting rapidly to events with over a quarter cutting investment and
10 per cent reviewing security measures, cutting overheads or reducing staff.

CBI
director-general Digby Jones said that firms were facing uncertain conditions,
but that the economy would stand firm in the coming months.

"September
11 was a body blow to business, which will lengthen the global slowdown. Firms
are bracing themselves for a rough ride, but our economy is resilient and we do
not expect an overall UK recession," he said.

He
also called on the Government to cut interest rates to help shore up business
and consumer confidence.

"The
situation is highly uncertain and much will depend on the policy makers. We
need another big cut in interest rates and a prudent plan for the budget,"
he added.

By Ross Wigham

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