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

"We support the decision to leave interest rates and Quantitative Easing unchanged. Given the dangers still facing the economy, the MPC must persevere with expansionary policies.


“Any thought of raising interest rates and withdrawing the QE stimulus must be rejected until there is conclusive evidence that growth is secure. The UK recovery is still fragile, and businesses require a prolonged period of low interest rates to cope with the huge pressures facing them.


“Risks of adverse market reactions to the inconclusive election result increase the threats to our credit rating. The MPC will not be able to ignore the inflationary consequences if sterling and the gilts market come under serious speculative attacks.


“To pre-empt these dangers, it is critical that the political leaders agree a detailed and credible plan for tackling the UK’s unsustainable deficit within the next few weeks. Only such a plan can forestall market pressure for damaging immediate cuts, and will make it easier for the MPC to keep interest rates low for an extended period.”