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

“The financial markets are almost unanimous in expecting no change at the MPC meeting, with interest rates being kept at 0.5% and the Quantitative Easing (QE) programme at £325bn. However, two committee members voted at the last meeting for an increase in QE to £350bn, and we’ll be interested to see whether support for such a move would gather momentum.  Although we have supported previous increases in QE, we feel that a further £25bn would be unnecessary as it would only have a marginal effect. There is ample liquidity in the financial system and there is no need to drive down yields on government bonds further.

"The main aim should be supporting real economic growth, by encouraging increased lending to viable businesses and making the new credit easing scheme more substantial. But the MPC should also reconsider its reluctance to include assets other than gilts, such as securitised SME loans, in the QE programme. This will make the banks less risk averse, and will help improve the flow of lending to credit-worthy firms.”


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