David Kern, Economic Adviser to the British Chambers of Commerce (BCC), said:"The MPC's decision to keep Base rate on hold at 5.00% was very widely expected. British business is learning to live with the impact of the increase announced last month. But it is important to stress that events since the November increase have worsened the resulting pain for British business. Recent developments also provide support for our view that there is certainly no case for a further increase in interest rates.
"The sharp strengthening of sterling in recent weeks, not only against the US dollar, but also on a trade-weighted basis, is effectively a tightening in monetary conditions and worsens the pressures on exporters' margins. But the stronger pound helps to reduce inflationary pressures in the economy, and lessens the pressures on the MPC. Falls in average earnings growth in the three months to September, and additional increases in unemployment, reinforce further the arguments against higher interest rates.
"To help sustain business confidence and avoid causing serious damage to the economy, it is important for the MPC to make it as clear as possible that further increases in rates would not be contemplated in the foreseeable future."