Commenting on today’s Monetary Policy Committee (MPC) interest rate decision, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:
“The MPC has clearly made the right decision to keep interest rates and quantitative easing on hold. At a time when inflation is falling and may temporarily enter negative territory, there is no strong argument for considering higher rates. Although wages are now rising, the scale of this increase is unlikely to create higher inflation in the foreseeable future.
“It is important to bear in the mind that the sharp fall in inflation over the past year has effectively raised interest rates in real terms. Moreover, the strengthening pound against the euro is already posing challenges for many UK exporters and higher interest rates would only make matters worse. Given this background, business confidence will be strengthened if the MPC clearly states that interest rates are likely to stay on hold until at least early 2016.”