• “An increase in QE is unnecessary...MPC should look to purchase other private sector assets, such as securitised SME loans”

Commenting on the Monetary Policy Committee minutes for April, published today by the Bank of England, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“As expected, the decision by the Monetary Policy Committee to maintain interest rates at 0.5% was unanimous. This month, there was a change in the committee’s vote on increasing the Quantitative Easing (QE) programme, with Adam Posen changing his vote in support of an increase, to against a further rise. The decision to maintain the current level of QE was taken with a majority of eight members to one, rather than seven to two.

“The minutes acknowledge that the fall in inflation in recent months has been less than the committee originally envisaged. The MPC also raised questions over the accuracy of initial ONS reports of sharp falls in construction that may push the economy into technical recession in Q1.

“In spite of current uncertainties around next week’s GDP figure, an increase in QE is unnecessary, and any impact would be marginal. The MPC’s main priority should be ensuring that the large amount of assets already purchased is put to better use. The recent increase in QE should be used to help increase the flow of lending to businesses. The MPC should also look to purchase other private sector assets, such as securitised SME loans.”


Notes to editors:

MPC minutes: http://www.bankofengland.co.uk/publications/minutes/Documents/mpc/pdf/2012/mpc1204.pdf

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. 

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