08/01/12

Commenting on the choices facing the Monetary Policy Committee (MPC) at its January 2012 meeting next Thursday, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
 
“The economic challenges facing the UK, and unresolved problems in the eurozone, highlight the importance of sustaining confidence within the business community. As the government perseveres with its plan to reduce the deficit, it must make efforts to help the economy continue to grow. At a time when fiscal policy is being tightened and our exporters are facing major challenges, UK monetary policy must remain as expansionary as possible. A further £50bn increase in the Quantitative Easing (QE) programme, to £325bn, will limit adverse effects on domestic demand. It will also provide support to exporters by helping to keep the sterling exchange rate competitive.
 
“Many commentators expect the MPC to wait until February before acting. But we believe that an announcement next week would boost confidence and ease concerns around the fate of the eurozone. However, the QE programme alone will not achieve its full potential to support growth without ways to improve the flow of credit to businesses, such as the implementation of effective credit-easing measures.”

Ends

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 over 100,000 businesses across the UK, which employ over five million people.

Media contacts:

Liz Larvin
Tel: 020 7654 5813 / 07825746812
Email: l.larvin@britishchambers.org.uk

Lisa Morrison
Tel: 020 7654 5812 / 07717682221
Email: l.morrison@britishchambers.org.uk