• MPC should delay rate increases until at least fourth quarter of 2011

Commenting ahead of today’s (Thursday) MPC decision, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“We expect the MPC to keep interest rates on hold at its July meeting. Inflation is still a major concern, and higher utility prices will probably push annual inflation to a peak of about 4.9 percent in the next few months. But this will only add to the pressures facing businesses and consumers. Raising interest rates while the government is implementing its deficit-cutting measures would increase the risk of a major economic setback.

“The UK economy is still growing, but manufacturers along with service sector firms face serious challenges in the months ahead. Signs of weakness in the global economy and the debt crisis in the eurozone are creating a difficult environment for UK exporters. As long as wage pressures remain muted, the MPC should hold its nerve and delay rate increases until the fourth quarter of the year.”


For further information please contact the BCC press office on 020 7654 5813 / 5812 or 07825746812 / 07717682221.

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. For more information visit: www.britishchambers.org.uk

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