The TUC is warning of between 100,000 and 150,000 manufacturing job losses by the end of the year, unless the Bank of England acts to bring interest rates down. In a report published as the Monetary Policy Committee prepares to meet, the TUC argues that there are few signs of inflationary pressures and that manufacturing is in desperate need of assistance.
The report, 'The price of inaction', warns:
- Manufacturing is in recession. Between 100,000 and 150,000 jobs are at risk this year alone;
- Overall economic growth will slow to around 2 per cent;
- Claimant count unemployment may rise above 1 million by the end of the year but any rise in overall unemployment will be modest by past standards;
- Inflation will remain low and below the Bank's target – there are few signs of significant inflationary pressures in the UK economy.
The TUC is recommending an interest rate cut of at least a quarter point in response to the worsening global economic position and the manufacturing recession. The TUC also wants to see an increase of £1 billion in industrial aid budgets with substantial increases in regional aid for the work of the Regional Development Agencies.
John Monks, TUC General Secretary, said: "The Bank cannot afford to ignore the chorus of calls for a cut in rates. The price of inaction will be the loss of at least 100,000 manufacturing jobs by the end of the year as the sector rides through recession. Concerns about inflationary pressures need to be kept in perspective because even the service sector appears to be slowing down."