Commenting on the December inflation figures published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The surge in inflation is slightly higher than expected, but it was widely predicted and does not justify tightening monetary policy.
“The UK economy is still weak, businesses continue to face serious problems, and there is ample spare capacity out there. With this in mind, it would be a major error to start tightening policy too soon. It is important to focus on steps aimed at allowing businesses to drive the economic recovery.
“The MPC must maintain a steady course on both interest rates and quantitative easing. While there is no need to increase the QE programme beyond £200bn, it is too early to withdraw the support, and it is certainly much too early to contemplate raising interest rates.”