Commeting ahead of the MPC's interest rate descision tomorrow, David Kern, Economic Adviser to the British Chambers of Commerce, said:
“Fears that consumer and business confidence are set to decline further have been reinforced by worsening fears over US prospects, and by worrying new evidence that the Christmas sales have been very disappointing for many UK retailers.
“We understand the MPC’s inclination to hold off, at least until February, but given the threats to the banking system and to the smooth flow of credit, we believe waiting would be a mistake. Recent sterling weakness is a problem for the MPC, but is not a good argument for delaying. A small cut in interest rates on Thursday will reduce the risk that emergency measures would be needed later in the year.”