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Saturday, 29 September, 2001, 09:26 GMT 10:26 UK
Manufacturing job cuts warning
BMW plant at Cowley
Union says industry faces jobs "haemorrhage"
The Manufacturing, Science and Finance Union has warned that at least 100,000 manufacturing jobs will be lost before the end of the year unless interest rates are cut further.

The union says industry faces a "jobs haemorrhage" unless action is taken to stave off recession.

The Bank of England's monetary policy committee, which last week trimmed UK rates by a quarter point to 4.75%, was urged to cut rates by a further 0.75% when it meets next week.

"The US and European Central banks have cut their interest rates right back to defend their economies and our MPC must throw their misplaced caution to the wind to protect our economy," said MSF general secretary Roger Lyons.

"We are in the midst of a global crisis. Now is not the time for half measures and tinkering around the fringes."

Another US move?

Twelve days ago, the European Central Bank (ECB) cut eurozone interest rates by a half point, following a similar move by the US Federal Reserve in the wake of the 11 September terrorist attacks.

And many economists believe the Fed will announce another rate cut - its ninth this year - at its meeting scheduled for 2 October.

Although viewed by some economists as a blunt instrument, the aim of any cut would be to encourage consumer and business spending, limiting the length and depth of economic downturn.

Eurozone rates stand at 3.75% while US rates are at 3%.

Thousands of manufacturing jobs have been lost in the past few days because of the economic fallout from the US terror attacks.

Jobless claims

The US Labor Department reported that the number of new jobless claims rose by 58,000 to 450,000 for the week ending 22 September, well above analysts' expectations, with 11,000 new claims coming in New York City alone.

Since the attacks, the aviation industry alone has laid off over 100,000 workers.

See also:

10 Sep 01 | Business
UK manufacturers' prices steady
06 Aug 01 | Business
UK manufacturing in recession
06 Aug 01 | Business
Q&A: The manufacturing recession
03 Aug 01 | Business
Gloom spreads to UK service sector
07 Aug 01 | Business
CBI: Manufacturers' woe worsens
10 Sep 01 | Business
CBI says DTI is too weak
17 Sep 01 | Business
US and ECB cut rates to stem panic
26 Sep 01 | Business
US economy in freefall
26 Sep 01 | Business
Aviation firms axe 26,000 jobs
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