Commenting on the January inflation figures, released today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The rise in inflation, to a level necessitating an explanatory letter from the Bank Governor to the Chancellor, was widely predicted. In fact, the actual January outcome was marginally lower than many analysts expected.
“On the basis of these figures, the MPC can maintain its credibility without overreacting to the inflationary threat. The British economy is still weak, businesses continue to experience numerous pressures, and it would be wrong for the MPC to contemplate a hike in interest rates at this time.
“By maintaining its current position, the MPC would make it easier for the Chancellor to present a more detailed plan for cutting the UK’s huge deficit in next month’s Budget – something that businesses across the country urgently want to see.”