Interest rates must be kept low to sustain recovery

Commenting ahead of Thursday’s Monetary Policy Committee (MPC) decision, David Kern, Chief Economist at the British Chambers of Commerce, said:
 
“We expect the MPC to keep interest rates and the quantitative easing programme unchanged this month. In spite of positive economic data for the second quarter of 2010, risks of a setback remain.
 
"The government’s forceful deficit-reduction measures will hit many companies’ cashflow. Any early tightening in policy would worsen the pressures facing businesses, and could seriously damage the economy at this stage of the recovery.
 
"British business will find it very difficult to drive the recovery without a prolonged period of low interest rates. Any consideration of raising interest rates should be dismissed until the middle of 2011 at the earliest.”

Ends

Media Contact:

Sam Turvey
Tel: 020 7654 5813
Email: s.turvey@britishchambers.org.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 business across the UK, which employ over five million people