Manufacturers in the North will today call for a quarter point cut in British interest rates in an effort to boost production as the Bank of England's monetary policy committee begins its monthly meeting.
The committee has left the UK base rate interest rates unchanged at 5.25 per cent since May but is coming under increasing pressure from big business to cut rates to curb consumer spend.
Despite a recent series of profit warnings and job lay-offs by British investors, key economic indicators such as retail sales and house prices remain steady in Britain, adding to the debate over the current base rate.
The Confederation of British Industry has been leading the campaign to persuade the Bank of England committee to reduce the base rate.
Mr Nigel Smyth, director of the CBI in Northern Ireland, said its surveys show that a quarter point cut would deliver a psychological boost to manufacturers in the North.
"There are lots of pressures facing manufacturers in Northern Ireland and while a quarter point cut is not going to significantly lessen the strength of sterling it would send the right signal to manufacturers," Mr Smyth said.
UK manufacturers claim the combination of high rates and a strong British pound is effectively choking industry. The CBI also believes a "two speed" economy is developing in the UK where traditional industries suffer while consumer spending and the service sector blossoms.
Although Northern Ireland has not witnessed widespread losses in the high-tech manufacturing sector, Mr Smyth believes there is justifiable concern that jobs will be vulnerable because of the general economic downturn.
The Bank of England monetary policy committee is expected to rule on interest rates tomorrow but Mr Bill Jeffrey from the Federation of Small Businesses in Northern Ireland said it hoped there would be no changes.
Last month the UK's influential National Institute for Economic and Social Research said in its latest quarterly review that it supported calls for a cut in interest rates.
But Mr Jeffrey believes the monetary policy committee should not give in to the demands of large corporations or manufacturers.
"We would prefer that interest rates are left on hold. Small businesses need people to buy as much as they can because we have had a difficult year to date and we need consumer spend to fuel a recovery," he said.
