The Construction Products Association (CPA) and Freight Transport Association (FTA) have sounded warnings about the latest interest rate rise and the growing cost of transporting goods by articulated truck.

The Bank of England‘s 0.25% hike in interest rates to 4.75%, widely expected by analysts, will add to cost pressures faced by the construction industry and reduce UK firms’ competitiveness against overseas suppliers, according to the CPA.

CPA economics director Allan Wilén also said the UK’s poor transport infrastructure and high fuel costs were also undermining the benefits of industry investment aimed at raising productivity.

Meanwhile, the FTA has said the annual costs of running a maximum weight articulated truck is set to exceed £100,000 by the end of 2004, with costs rising by an average of 5.4% this year and 4.6% in 2005.

&#8220The UK’s poor transport infrastructure and high fuel costs are undermining the benefits of industry investment aimed at raising productivity”

CPA economics director Allan Wilén

The association’s recently published Manager’s Guide to Distribution Costs shows fuel costs are about £28,000 per year, while insurance costs account for £3,500 and depreciation is responsible for £10,500. Driver wage costs are the single biggest element averaging £28,500, including accommodation and meal expenses.

Simon Chapman, FTA chief economist, said: “The soaring price of fuel and the impact of the Working Time Directive, which will reduce the number of hours a driver can work to an average of 48 hours per week, are set to create a heady cocktail of price pressures.”