MPC minutes confirm growing economic risks

Commenting on the MPC minutes published today, David Kern, Economic Adviser to the British Chambers of Commerce, said:

"Today's minutes highlight a welcome shift in the attitude of the majority of MPC members with respect to the seriousness of the situation in the UK credit markets. This reinforces the acknowledgement of the need for action indicated earlier this week by the Bank of England's special facility to support the credit market. However, the decision to cut rates earlier this month was taken after a split vote; with 6 members voting for a quarter per cent cut, one member voting for an half per cent cut, and two members voting for no change in rates. While this difference of opinion within the MPC is understandable given the underlying uncertainties, it is worrying that a minority of members are still more concerned about inflationary pressures in spite of the growing risks facing the economy.

"The minutes acknowledge the further deterioration in the outlook for the supply of credit, whilst the worrying messages in the latest credit condition survey may have damaging effects on business. It is very important to ensure that the problems in the mortgage market do not damage the business sector. We still urge the MPC to cut rates to 4.75% in May, to counter these dangers."

Ends

Media Contacts:

Nick Dines
Tel: 020 7654 5812
Email: n.dines@britishchambers.org.uk

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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.