Interest rate cut not enough, says RMIF

Jan 8 2009

The Retail Motor Industry Federation (RMIF) has called for the government to take greater action to bolster the UK car market.

Unsecured Car Loans customers were boosted by a further interest rate cut by the Bank of England's monetary policy committee today, with a reduction from two per cent to 1.5 per cent.

However, director of the RMIF Sue Robinson called for the government to end its reliance on interest rate cuts to stimulate the economy.

Instead, she called for such decisions to be part of "a wider package of measures" to help improve the situation.

"We urge that more direct approaches are used as soon as possible," said Ms Robinson.

While interest rate reductions will help car loans customers, it will also penalise savers and those reliant on interest for their disposable income, she added.

Unless counterbalanced with tax cuts and business support measures, further cuts could have "a negligible effect" on the economy, Ms Robinson insisted.

The Scottish Motor Trade Association issued a similar message, stating that today's reduction will not be enough to act as a stimulus for business or the economy.

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