Cuts in the cost of borrowing are a positive move for businesses in Bradford and will help the local economy.

This is the view of the president of Bradford Chamber, Balbir Panesar, following the decision by the Bank of England's Monetary Policy Committee to cut interest rates by a quarter point to 5.5 per cent.

The move follows a recent minor decline in the housing market and banks adopting more cautious lending policies following troubles in the American sub-prime market.

Mr Panesar said: "The announcement has come as a little bit of a surprise as it was thought the Monetary Policy Committee would wait until the new year before making a change.

"It is a welcome pre-Christmas bonus for many of our members who have been facing increasingly challenging times of late. The local economy is still performing relatively well but with the expected national and international downturn next year, and the ongoing repercussions from the banking and finance sectors, the interest rate cut is a positive move."

Yesterday the Telegraph & Argus featured a report from the Halifax which said house prices had fallen for three months in a row.

A spokesman for the CBI in Yorkshire said: "While there are as yet few signs that tighter credit conditions are heavily affecting the wider economy, the bank is clearly concerned about continuing fragility in the financial markets and the effects on confidence more widely.

"It was a close call, with the bank having to worry about inflationary pressures into 2008, whilst needing to ensure orderly credit markets and support business and consumer sentiment."

Tom Vosa, chief economist with the Yorkshire Bank, said: "Our forecasts suggest that money market tensions are unlikely to ease until the third quarter of 2008, by which time slowing eurozone growth will make additional tightening unnecessary."

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