MPC has missed a valuable opportunity

Commenting on today’s MPC interest rate decision, David Kern, Economic Adviser to the British Chambers of Commerce, said:

"We are disappointed but not surprised by this decision.  After cutting rates in April, most analysts have predicted correctly that the MPC would be reluctant to cut rates again in May. However, we believe this decision was a mistake given the serious threats to economic growth. The MPC has missed a valuable opportunity to underpin business and consumer confidence and to limit the potential damage to the economy.

“We are aware that the MPC cannot disregard the inflationary risks arising from surging food and energy prices, but countering the acute threats to growth must be given a greater priority in the immediate future. Plunging consumer confidence, falling house prices, and worsening pressures on bank capital are a toxic mix that must be countered by a more pro-active policy stance. We strongly urge the MPC to cut interest rates to 4.75% in June.”

Ends

Media Contacts:

Nick Dines
Tel: 020 7654 5812
Email: n.dines@britishchambers.org.uk

OR

Sam Turvey
Tel: 020 7654 5813
Email: s.turvey@britishchambers.org.uk

Notes to Editors:

The British Chambers of Commerce (BCC) is the National Voice of Local Business.
The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce serving business across the UK, which employ over five million people.