By Claire West
Commenting on the inflation figure for October, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:
“The slight increase in inflation was mildly disappointing, but broadly in line with the forecast published in the Bank of England’s Inflation Report. The available evidence still supports the Bank’s assessment that after a temporary increase, inflation will come down significantly over the next 12-18 months.
“Inflationary expectations remain under control and wage increases are modest. The threat of a major setback to growth remains much greater than the risk of a surge in inflation, and pressures facing businesses and individuals are likely to increase over the next year.
“Against this background, we continue to urge the MPC to persevere with expansionary policies and to maintain low interest rates for as long as possible. While it may be reluctant to increase the QE programme immediately, this option must be kept under active consideration if the economy starts to weaken in the foreseeable future.”