Commenting on the MPC minutes released today by the Bank of England, David Kern, Economic Adviser to the British Chambers of Commerce (BCC), said:
"The new MPC minutes, and the alarming messages conveyed by Governor Mervyn King in his speech to Leeds Chamber of Commerce, highlight the big risks facing the UK economy. The minutes acknowledge that the threat to growth has worsened sharply, while inflation is set to fall after its current peak.
"We strongly believe that a further cut in interest rates to four per cent in November would be an important step aimed at alleviating the severity of the recession and to help restore business and consumer confidence.
"The sharp falls in sterling, following the Governor's speech, would in normal times limit the scope for rate cuts. But the economy's weakness is the main reason for the fall in sterling. Firm action to support growth will very probably strengthen the pound in today's circumstances. Interest rate cuts are vital to underpin the banking sector rescue package."