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

“Following the unanimous vote at the last MPC meeting in favour of keeping interest rates on hold, it is unlikely that we will see a change today. Given signs of weakness in the economy, there are arguments for raising the QE programme immediately from £200bn to £250bn. But we would not be surprised if the MPC decides to delay such a move until later in the year because of concerns around inflation and a reluctance to alter policy too abruptly.

“At the same time, the MPC cannot ignore the worsening international situation and the need to underpin business confidence. It would therefore be helpful if the Committee takes an early opportunity to make it clear that unless circumstances significantly improve, interest rate increases will not be on the agenda for another year. In the US, the Federal Reserve has stated recently that it expects to keep interest rates at very low levels until at least the middle of 2013. British business would welcome a similar move in this country.”