BANK CORRECT TO KEEP RATE AT 5.50 PER CENT FURTHER UNNECESSARY RISES MUST BE RESISTED

We are pleased that the MPC has rejected pressures for an immediate increase in rates. After four rate rises over the last ten months UK businesses are experiencing acute pain, and the pressures will inevitably worsen in the forthcoming months. The measures already taken must be given more time to work before rushing to push rates up further.

“With UK inflation set to fall sharply in the next few months, and with the pace of economic activity set to slow, there is a clear risk that interest rates would be pushed to an unnecessarily high level. Such a dangerous overreaction would trigger damaging consequences for British business. The MPC should continue to react to the facts, and should disregard misguided challenges to its credibility

"We accept that a further increase in interest rates may eventually prove to be unavoidable later in the year. But, as long as the labour market shows no sign of tightening, there is no justification in raising rates immediately. We are now rapidly approaching the point where there is heightened danger of harmful monetary overkill. We urge the MPC to persevere with a cautious and gradual approach. Excessive tightening could easily push the economy into reverse, and cause a dangerous downturn.”

ENDS

MEDIA CONTACT:

• NICK DINES
• Tel: 020 7654 5812
• Email: n.dines@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.