Commenting on the quarterly Inflation Report, published today by the Bank of England, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:

“Mervyn King tried to paint a less pessimistic picture about the UK’s recent performance, by emphasising that manufacturing and services taken together have recorded positive growth over the past year. However it is clear that the outlook over the next three years remains grim. The pace of expansion in the economy will remain weak, and inflation is likely to stay above the target over the next two years. The squeeze felt by businesses and consumers will persist, and given the continued difficulties facing the eurozone, it will be very difficult to rebalance the economy towards net exports, in the short-term.

“Over the next few months there will inevitably be uncertainty, over whether the arrival of Mark Carney as the next Bank Governor will foreshadow major changes in monetary policy. The MPC is already being more forthcoming in signalling its future intentions, as the next Governor prefers. Meanwhile, it is disappointing that Governor King does not agree that there would be benefits in the MPC purchasing assets other than gilts, such as securitised SME lending, as part of its QE programme. We believe that the MPC can take its own initiative and purchase such assets, making commercial banks less risk-averse, and stimulating the flow of credit to the economy.”


Notes to editors:

Bank of England Inflation Report: http://www.bankofengland.co.uk/publications/Documents/inflationreport/2013/ir13feb.pdf

Media contacts:

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Allan Williams – Press and Communications Officer

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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