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

 "The decision to leave interest rates and the Quantitative Easing (QE) programme unchanged this month is not surprising.  

“We still believe there are strong arguments for injecting additional QE, with VAT due to increase to 20% over the next few months and the fiscal austerity programme to be implemented more forcefully. But, with the Comprehensive Spending Review imminent, and a new Inflation Report due in November, we understand the MPC’s wish to wait before acting.

  

 “Any uncertainty over the future course of interest rates could harm confidence. Business will find it difficult to drive recovery without clear knowledge that interest rate increases will not be contemplated for an extended period.  

“Persistent dangers of global setbacks, both in the US and the Eurozone, and the huge pressures likely to face British business as the budget deficit is cut, make it important for the MPC to intensify its expansionary policies in the short-term.”