The Bank of England Monetary Policy Committee announced today that the base rate has been left unchanged for the 27th month in a row. The Lloyds TSB corporate market team issued the following comment: Trevor Kirk, Senior Manager of Corporate Banking, on the Isle of Man said: “Low interest rates support economic growth but carry the risk of inflation. As we rely on the Bank of England monetary policy committee’s decision and don’t set our own interest rates, this directly affects the Manx economy. It is better for businesses to invest in themselves rather than place funds on deposit when rates are low (providing they are sufficiently confident of the future) and this in turn means more employment in the private sector. At a time when our public sector workforce is having to shrink, this has to be positive. As we are all aware, our inflation rate is higher than the UK and it is important that our wages are carefully controlled as increasing wages in line with inflation would cause a spiral and then start to erode capital values. This would be very bad news for those who have lived prudently and saved for their futures. People who once were able to live off their interest and dividends are already having to erode their capital for income purposes and therefore would very much like to see interest rates back above 5%.” For further information please call Trevor on 01624 638216 or by email Trevor.kirk@lloydstsb-offshore.com - ENDS -