Industry warns against rate hike

Industry leaders warned this week against the interest rate rise that the Chancellor of the Exchequer may be poised to deliver.

The Building Employers Confederation warned of 'dire consequences for the construction industry' if rates rise again. It also pointed to the damage done by recent rises, which had 'jeopardised the very limited construction recovery that began last year'.

House prices would rise, construction jobs would go and the public sector borrowing requirement would rise, said director-general Ian Deslandes.

Taylor Woodrow chief executive Tony Palmer added his voice to the BEC warning. 'It's not going to help. I understand the need for the battle against inflation, and in the longer term that will be good for the business. But in the short term, a rise could be very serious and may lead to further job losses.'

Wimpey chief executive Joe Dwyer said he would regret any rise, but that the effect on housing may not be damaging. 'It all depends on the psychological effect the rise has on buyers. In affordability terms, there should be even more bargains around.'

Asked whether construction's lobby groups could be doing more to head off the rise, Dwyer replied: 'There is no real point in talking to Mr Clarke. The Government is not particularly concerned about the construction industry.'