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

“We are expecting the MPC to keep rates on hold at its May meeting. Recent global events and weak economic data have strengthened the case for postponing rate increases and maintaining QE at its current level of £200 billion.

“Inflation fell in March and wage pressures remain modest. In addition, weak manufacturing data was at its lowest level in seven months, while UK GDP growth was fairly mediocre in the first quarter of 2011. This suggests that the economy was virtually flat over the past six months.

“The government's deficit-cutting plan will increase pressures on businesses and consumers. Raising interest rates at the current time could risk a new setback, and every effort must be made to ensure this does not happen. The MPC must persevere with current policies that promote growth and jobs until the recovery is more secure.”