The Bank of England Monetary Policy Committee has decided has kept interest rates at 5 per cent for a fifth month in a row.

Following the decision, both CBI Scotland and the Scottish Chambers of Commerce called for an interest rates cut if inflation begins to fall.

Iain Ferguson, Policy Executive at CBI Scotland said: “Worries about inflation have clearly underpinned this decision to keep rates on hold. If, as expected, inflation dips over the autumn then the chances of rate cuts increase, which should provide welcome relief for those business servicing debts and those looking to borrow to invest.”

Liz Cameron, the chief executive of Scottish Chambers of Commerce, said: “With inflation nearing its expected peak this autumn, the decision to keep interest rates on hold this month comes as no surprise.    However if as expected we begin to see falling inflation again towards the end of the year, then it is vital that the Bank of England acts in a timely fashion to reduce interest rates further in order to support Scottish businesses.

“There is no doubt that the economic slowdown is beginning to impact on Scottish firms and an interest rate cut before the end of the year would act as a vital boost to business confidence north of the border.”

Inflation, measured by the Consumer Prices Index, was 4.4 per cent in July, more than double the Bank's target of 2 per cent.

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