Commenting on the quarterly inflation report published today by the Bank of England, David Kern, Chief Economist at the British Chambers of Commerce, said:

 “The new inflation report highlights the difficult circumstances facing the British economy in the months ahead. Compared with the previous report, the Bank of England indicates weaker growth and higher inflation. Nevertheless the implication of the Bank’s forecast, based on market expectations of interest rates, is that the MPC will start raising rates around May this year. While this is not surprising it would increase the pressures on businesses and individuals and heighten the risk of derailing the recovery.   “High inflation is clearly a major concern and the MPC must protect its credibility. However the recovery is still very fragile and the economy must still absorb the impact of the Government’s deficit-cutting programme. Given this background, it’s critical for the MPC to proceed with great caution. If the economy shows signs of weakening, planned interest rate increases should be postponed. On its part the Government must do all it can to enable businesses to create jobs and invest.”