Commenting on the Monetary Policy Committee (MPC) minutes, published today by the Bank of England, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“These minutes are as expected. Once again there was a three-way split: one member voted for a small increase in interest rates; another voted for a £50 billion increase in QE; while the remaining seven members agreed that the right policy is to persevere with the current expansionary approach.

“The majority of MPC members supported the view that, while inflation will remain temporarily above target, it is likely to fall towards 2% in the medium-term.

“British businesses need a prolonged period of low interest rates to cope with the serious pressures still facing them, and to drive a lasting recovery. Given the domestic and international dangers, we urge the MPC not to contemplate any interest rate rise until the second half of 2011 at the earliest. The option of a further increase in QE must also be kept under active consideration if the economy starts to weaken.”