Date posted: 3rd Feb 2026
The majority of members of the North East Shadow MPC had no appetite to change interest rates in the first decision of 2026.
The Shadow MPC is a partnership between Newsquest, Clive Owen LLP and Recognition PR.
Nicola Bellerby, tax partner at Clive Owen LLP, called for a hold in the current base rate, but believes there could be cuts to interest rates over the course of the year, unless inflationary pressures fail to ease.
She commented: “Inflation remains high and continues to suppress both business investment and consumer spending, a trend clearly reflected in the latest ICAEW Business Confidence Monitor for the North East.
“The data highlights a marked decline in confidence across our region, driven by the measures announced in last November’s Budget, which are already weighing heavily on several key sectors, particularly hospitality and retail.”
David Coates, managing director of Newsquest North, said: “My vote would be to hold rates. I’m not convinced that inflation has been beaten and it is too soon to consider further rate cuts.”
Graham Robb, senior partner at Recognition PR, said: “I vote to hold rates. The US has held rates and our inflation is still far above target. The economy would be boosted with a rate cut but the inflation consequences would be too risky today.”
Karl Pemberton, managing director, Active Financial Planners said: “Given recent inflation figures showing an upward trend, I feel it would be irresponsible to reduce rates even further at this moment. Whilst history would also tell us to increase rates when the inflation trend is upwards, I believe a period of stability is now what is needed to see how recent economic policies play out in reality over the next few quarters.”
Tim Bailey, head of practice at Xsite Architecture LLP said: “My vote is to hold. As it is typical in the development sector for financial decisions today to have realisation consequences in two or three years and the fact that there is so much uncertainty in the global economy at the moment means to my thinking that a rate change up or down would have virtually no effect and that there is more benefit in the perception that something in the mix is reliable and steady. Also makes sense (for similar reasons) to follow the US Fed decision. Construction is looking very much weaker in this quarter than 12 months ago but a rate change is not likely to change much in that sector either.”
Martyn Tennant, partner at Swinburne Maddison, said: “Even with our desire to stimulate the economy and support business growth we couldn’t justify a cut. Wage growth continues to apply inflationary pressure (although not has high as it has been, it’s still expected to be 3.5% to 4%) and higher than the compatible inflationary rate of 3%. Businesses could argue that these additional staff costs (including NI and the increase in living wage) are already cooling the economy, so the Bank doesn’t need to keep interest rates quite so high to fight inflation. There is a knock on to rising unemployment figures which in theory should slow inflation but due to increased costs this remains ‘sticky’, a cut wouldn’t feel sensible under these circumstances.”
Donna James, research director at Populus Select voted to hold: She said: There are signs of disinflationary trends (softer labour market), world events are causing inflation to be persistent (our core inflation remained unchanged) plus domestic services inflation increasing slightly.”
Arnab Basu, CEO and founder of Kromek Group plc, said: “My recommendation for the UK Monetary Policy Committee should be to hold interest rates at 3.75% to ensure inflation is sustainably returning to the 2% target. Although inflation has eased from its peak over last years, it remains well above target and pressures from strong wage growth and services inflation is persisting. We also are seeing certain degree of uncertainty in international trade front with threats of tariffs which, if implemented may adversely affect inflation. There are some indications of economic growth although weak, which also points towards not immediately needing to cut rates.”
Gary Smith, senior client partner, Evelyn Partners said: “I would vote for an interest rate cut to try and stimulate growth within the economy. The expectation is that UK inflation will continue to fall during 2026, and this should reduce pressure on the Bank of England to maintain interest rates at the current levels.”
Catriona Lingwood, chief executive at Constructing Excellence in the North East, also voted to cut rates: “A modest cut would reduce unnecessary drag in interest sensitive sectors like housing and development, without materially increasing inflation risk, and keeps policy clearly on a gradual path.”
Gavin Cordwell Smith, chief executive, Hellens Group, said: “Against a backdrop that inflation is easing albeit slowly and a softening jobs market, there remains some global and domestic uncertainties which continue to delay investment decisions. The Bank of England should take the opportunity to prioritise the economy and reduce the base rate by 0.25%.”
