Commenting on today’s Monetary Policy Committee (MPC) decision, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

"The decision to leave interest rates and the quantitative easing programme unchanged this month is not surprising. Until a few weeks ago, many analysts expected an increase in QE. But, following the publication of strong GDP figures for the third quarter of 2010, it was clear that the MPC would find it difficult to take such a decision in November.

“Nevertheless, we believe there are strong arguments for injecting additional QE into the economy over the next few months. As VAT increases to 20% in January, and the deficit-cutting programme moves to a higher gear in 2011, risks of a setback will inevitably worsen.

“While we support the painful measures needed to stabilise Britain’s public finances, every effort must be made to minimise the danger of a new economic downturn. In the foreseeable future, threats to growth will remain much more serious than the risks of higher inflation, and the MPC must act accordingly.”