Commenting on the MPC minutes released today by the Bank of England, and on the labour market figures issued by the ONS, David Kern, Economic Adviser to the British Chambers of Commerce, said:
"The new MPC minutes reveal a welcome shift towards a more accommodating stance. One member has abandoned his previous calls for a rise in rates, while another member has called for a cut in rates. “But the alarming financial turmoil, and the speculative attacks on the share prices of major UK banks, highlight the urgent need for a forceful response.
“The Bank of England must urgently remove the uncertainties about the extension of its Special Liquidity Schemes, and reconsider its plans for tightening the scheme.
“Labour market figures highlight the worsening recessionary pressures in the economy. Unemployment is up, employment and vacancies are down.
“With a continued muted increase in average earnings the MPC should find it easier to cut interest rates in October.
“The UK cannot afford a banking crisis and banks must be supported by adequate liquidity. Authorities in the UK must be as pro-active as those in the US.”