Economic divide widens Fall in manufacturing output creates election-eve dilemma on interest rates.
While manufacturing is mired in recession, consumers are borrowing at a record rate - posing a dilemma for the Bank of England's monetary policy committee at its meeting next week. Analysts fear another cut in interest rates could fuel more spending by consumers celebrating lower mortgage rates. The Bank is counting on households tightening their belts to make room for the boost to the economy from higher public spending. We would liken the current situation to a man standing on two islands of ice in the Antarctic which are slowly drifting apart. Sterling's renewed strength in relation to the euro and the continuing decline in the US economy are squeezing British order books, according to the Chartered Institute of Purchasing and Supply.