Commenting ahead of the MPC’s interest rate decision on Thursday, David Kern, Economic Adviser to the British Chambers of Commerce, said:
“Most analysts expect the MPC to keep interest rates on hold today, but delaying would be a mistake. Global and domestic economic circumstances have deteriorated since the February meeting and we believe that there is a clear need for a further cut in rates to 5%.
“Inflation remains a danger and the Bank of England must of course act with caution. However, the threats to growth are more urgent at present and preventing a downturn must be the top priority in the near future.
“British business has so far remained remarkably resilient in the face of worsening threats. Unless urgent action is taken to alleviate the credit crunch we will face growing risks that confidence will crumble. If this occurs, the MPC would be left with more dangerous and more unpalatable options in the long term.”