Ease strict monetary policy, left tell Blair

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TONY BLAIR came under strong pressure to make a U-turn on economic policy at a meeting of Labour's National Executive Committee, yesterday. The Prime Minister will also be urged to throw his weight behind calls for a cut in interest rates at next week's party conference. As job losses mount, emergency motions have flooded in from Labour's industrial heartlands urging action to lower the value of sterling.

At yesterday's national executive left-wingers Dennis Skinner, Ken Livingstone and Diane Abbott, demanded that strict monetary policies be eased and warned the Prime Minister that Labour would pay a high price for handing control of interest rates to the Bank of England. They predicted big job losses in the party's strongholds. In a heated debate Mr Blair strongly defended his economic policy and was adamant that he would not change course. He insisted that the Government "had to see it through" in order to avoid "a return to the days of boom and bust".

Calls for intervention from the constituencies will be reinforced on the eve of conference by the Amalgamated Engineering and Electrical Union and the Manufacturing, Science, Finance Union which will reaffirm their belief that the economy needs a boost.

While at the TUC last week the Prime Minister indicated privately his view that interest rates should come down. Labour Party delegates will be looking for a strong hint in public.

Ken Jackson, leader of the engineering union, said the message from the TUC was loud and clear that interest rates should be cut to avert a "manufacturing slump". "Communities most affected by recession are rooted in Labour's heartlands. We cannot afford to forget those communities that need our help most and need it now," he said.

Roger Lyons, leader of MSF, said Tony Blair's idea that co-ordinated action at international level was something which should should be prosecuted with urgency.