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

"British business is not surprised by the MPC’s decision today. With the recession worsening, and deflation a distinct risk, there is still scope for further interest rate cuts in the next few months, to almost zero.

"But, with rates at very low levels already, the focus of UK monetary policy must now inevitably shift towards forceful quantitative and credit easing measures, with the aim of increasing the money supply and removing blockages in the credit markets.

"Given the Bank’s unduly cautious record in the early stages of the credit crisis, UK businesses must be reassured that the Bank will be prepared to implement unconventional techniques. This is vital in order to alleviate the recession, counter threats of deflation, and underpin falling confidence."