Interest rates must stay low while economy remains fragile
06/09/10 | 00:01
Commenting on the choices facing the Monetary Policy Committee (MPC) at its September meeting next Thursday, David Kern, Chief Economist at the British Chambers of Commerce, said:
“Despite the upward revision to GDP in the second quarter, there is no room for complacency. Falling house prices and further declines in bank lending to business highlight potential risks in the third quarter. Worrying signs that the global economy may be slowing will only heighten the uncertainties facing the UK economy.
“The Government’s tough deficit-cutting programme, although necessary to stabilise our public finances, will involve measures of unprecedented severity, and will inevitably increase threats of an economic setback. To counter the dangers of a relapse, it is vital that the MPC keeps interest rates as low as possible, for as long as possible.
“Any thought of tightening monetary policy must be rejected until the recovery is more secure. If the economy shows signs of weakness, the MPC must be ready to increase the Quantitative Easing programme above £200 billion. Ensuring that the recovery is sustained must be the highest priority at the present time.”
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