Commenting on the choices facing the Monetary Policy Committee (MPC) at its May 2012 meeting next Thursday, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“It seems likely that the MPC’s decision will remain the same at Thursday’s meeting, with interest rates being held at 0.50% and quantitative easing (QE) at £325bn. However, last month’s minutes reveal a welcome shift of opinion against demands for more QE, with those in favour falling from two to only one. We believe that further increases in QE are unnecessary, and we are pleased that most market analysts now seem to agree. But UK growth remains too low, and we need to see a reallocation of priorities that will empower businesses to create jobs, invest and export.

“New data showed that lending to non-financial UK businesses fell again in March. Therefore, the MPC’s main priority should be to help boost the flow of credit to worthy businesses. The Committee should reconsider its reluctance to purchase assets other than gilts, such as securitised SME loans. This would make the banks less risk averse and would help to remove one of the major obstacles to a sustainable recovery in the 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 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