Reacting to today's interest rate decision David Kern, Economic Adviser to the British Chambers of Commerce (BCC), said:

"We are not surprised by today's MPC decision to leave interest rates unchanged at 4.50 per cent. The decision was widely expected by the markets, and we believe that the MPC has made the right decision. But we reject calls in some quarters for a pre-emptive increase in interest rates. We are particularly worried that one member of the MPC voted for an increase in rates in May as we strongly believe raising rates would be very damaging at the present time.”

"Given the results of the BCC's April QES survey and the modest improvement in Q1 GDP growth, we accept that the MPC was right to keep rates on hold.  But there is no case for an increase. The turmoil in the global markets signal potential threats and the UK’s economic upturn is still fragile and tentative. Household consumption growth slowed markedly in Q1, to only 0.2 per cent. Businesses face huge burdens and the UK recovery is vulnerable to setbacks.”

"The UK labour market continues to weaken. In Q1, the number of unemployed people increased by 44,000 over the quarter and by 177,000 over the year, to reach 1.59 million. The claimant count was 945,500 in April 2006, up 7,700 on the previous month and up 106,300 on the year. There is no evidence that inflationary pressures are worsening.”

"In the face of heightened global & domestic uncertainties, we strongly urge the MPC to continue to reject calls for early interest rate increases."