LONDON (AFX) - The Confederation of British Industry applauded the Bank of England for acting to soften the business impact of a slowdown in the U.S. economy.
Responding to the BoE's decision to cut its repo rate by 25 basis points to 5.50 pct, CBI director-general Digby Jones said he does not expect the UK to go into recession, "but it is clear there are stormy waters ahead".
Jones said both the manufacturing and service sectors are seeing effects of the problems in the U.S., and that although the UK's economic fundamentals are strong, "down the line business pessimism could feed through to consumers".
"With earnings still subdued, despite a fall in unemployment, this was a good time to take preemptive action," he added.