Governor wanted new cash injection

BANK of England Governor Sir Mervyn King stuck to his guns in wanting to pump more money into the economy this month, despite recent glimmers of hope for growth.

Sir Mervyn and two other members of the Bank’s Monetary Policy Committee pushed for the amount of cash injected into the economy to boost growth to be increased by £25 billion to £400bn, minutes of the meeting showed.

They failed to persuade fellow committee members, who were likely to have been concerned that the measure would push up inflation. The Bank’s interest rate was held at an historic low of 0.5%.

H o w e ve r, figures yesterday showed a fall in consumer price inflation from 2.8% to 2.4%, a move which could give policymakers room to manoeuvre should they feel more stimulus is needed to get the economy moving.

The pound fell back on the possibility of more QE, dropping 0.4% against the dollar to 1.51 and 0.6% against the euro to 1.17. was up 13.3% on a year earlier at £65.88. The sector in Edinburgh enjoyed a 13.7% year-on-year increase to £50.94.

However, there was a 6.1% year-on-year fall in rooms yield in Glasgow in March to £42.76. And the hotel sector in Inverness experienced a 0.8% year-on-year decline in revenue per available room to £24.76 in March.

All four of these Scottish cities achieved a year-on-year rise in occupancy in March. Occupancy in Aberdeen came in at 75.7% in March, up from 75.5% a year earlier, with Edinburgh at 69.8%, up from 69% in March last year, Glasgow at 75.6%, compared with 73.9%, and Inverness at 70.7%, up from 69.2%.

Alastair Rae, a BDO partner specialising in the property, leisure and hospitality sectors, cited the boost to hotels in Aberdeen from the oil and gas industry.

He said: “Aber d e e n remains buoyant due to the continued high oil price, which supports the wider economy, and benefited further from specific events during March.”