Commenting on the inflation figures for May published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“CPI inflation was slightly lower than expected and supports our assessment that inflation peaked in April.

 

Given the continued weakness of the economy, and the tough deficit-reduction measures expected in next week’s Budget, it is important for the MPC to maintain low interest rates for a prolonged period. Any premature rise in interest rates would heighten the risk of triggering a new downturn.

 

With growing confidence that the UK will be able to deal with its deficit, the MPC can be reassured that maintaining low interest rates will not worsen inflationary pressure. This will create the right circumstances for businesses to invest and drive a sustainable economic recovery.”