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

"We expected and support the MPC’s decision to continue with a holding approach. But, it should consider new techniques aimed at improving the effectiveness of the quantitative easing programme. 

“A fragile recovery is now under way, but the upturn must be nurtured to counter risks of a relapse. Despite the upward revision to GDP in the fourth quarter of 2009, and the prospect of positive growth in the first quarter of this year, the economy remains weak and vulnerable to a setback. Businesses remain under pressure and there is absolutely no room for complacency. 

"It would be wrong to contemplate raising interest rates or reducing QE at present. Given the dangers still facing the economy, it is important that the MPC perseveres with an expansionary strategy. Threats of a double-dip recession remain more serious in the near future than risks of higher inflation."