Commenting on today's Bank of England Minutes relating to the MPC meeting held on the 7th & 8th of February 2007, David Kern, Economic Adviser to the BCC, said:

"The news that the MPC voted by a strong majority of 7 against 2 to keep Bank Rate on hold at 5.25% supports our repeated calls for a period of stability in interest rates. The MPC must avoid at all cost damaging monetary overkill."

"While highlighting the various risks facing the economy, the MPC Minutes state: "But most members thought that the balance of all these risks was such that it was appropriate to leave Bank Rate unchanged this month. A closely spaced series of interest rate increases might lead to excessive tightening. There was time to observe the impact of past decisions and to see whether any of the upside or downside risks were crystallising. We believe these views provide strong backing for the policy line taken by the BCC." 

"British businesses are committed to stability and low inflation. We accept that inflation is a problem, and the MPC may have to take further action. But we believe that the cumulative effects of three interest increases implemented since August 2006 will prove to be very significant. A marked slowdown in the pace of growth is highly likely even if Bank rate stays at 5.25%. To avoid causing unnecessary damage to the economy, it is important not to over-react. The MPC can afford to wait until trends in wage settlements become clearer."