A manufacturer's response

Not a story you hear too often in the current climate, but Ross and Bonnyman is a manufacturing firm that's working flat out, with full order books for its lorry tail lifts and doors.

Their products are sold mainly in the UK but the company also has a manufacturing centre in Belgium, and outsources work to China and Eastern Europe.

In many ways it's a typical picture for a modern manfucturer - juggling with exchange rates to improve export sales, but also trying to cut costs by importing from countries with cheaper labour rates.

The Bank of England interest rate decision today, of a 0.25% increase to 3.75%, has had a mixed response at the company.

Confidence

The company's chairman, Freddie Craig, is worried about the long-term impact of the rate raise.

He says, "It's not helpful... It puts more pressure on ourselves and on our customers.

"There is a feeling that these interest rates might continue to go up. It's all to do with confidence in the market place and our customers.

"I just hope that this isn't going to be a knock on confidence.

"The last thing we want to even think about is to reduce our workforce - we've got a fantastic workforce."

Happy

An employee, Gavin Alexander, says, "I never really thought about interest rates before now. I really wish I'd got a fixed one [for my mortgage] confirmed a wee while back, before today."

On the other hand, Arthur Bywater says there's "too much emphasis on [mortgages] and not enough on people who have got money to invest.

"I'm quite happy that the rates are going up.

"For people who are facing retirement or buying annuities, it's a good thing."

Costs

As we've been reporting on Working Lunch, British industry has been through a tough time in the last few years - competiton from the Far East has caused a lot of damage.

But the one thing industry has been able to rely on is interest rates going down - hence the alarm bells ringing today.

Ross and Bonnyman has around 30 competitors across Europe, so every cost is crucial.

It knows that if the pound strengthens as a result of interest rate rises, it'll mean it can buy its imported parts for less, but it will also make it harder to sell its exports.

Demand in Britain for its products is booming at the moment, but in Europe it's flat.

If rate rises continue, the money it's borrowed to finance investment will become more and more expensive to repay too.