By Marcus Leach
Speaking ahead of the Bank of England's first Monetary Policy Committee (MPC) meeting of the new year, David Kern, Chief Economist at the British Chambers of Commerce (BCC), has said he expects little to change.
Last year the interest rate was held, at a record low of 0.5%, on every occasion the MPC met, with quantitative easing reaching £375 billion.
Now, ahead of the first meeting in 2013, to take place on Thursday, Mr Kern says he can't see the trends changing.
“We expect the MPC to make no changes this month, holding interest rates at 0.5% and the Quantitative Easing (QE) programme at £375 billion," he said.
"But the next few months will be a period of considerable uncertainty for the MPC. Although earlier pressures for increasing QE have eased, if growth remains week, it is possible that demands for more QE will intensify. Such a measure should be avoided, as adding to QE would only provide marginal benefits for the economy, while raising the risk of higher inflation.
“Mark Carney takes over as the next Bank of England Governor on 1st July, and his appointment has triggered speculation that the UK may move to a new monetary regime.
"It is important that the transition to a new Governor over the next six months does not worsen business uncertainties or paralyse the MPC. During this crucial period, the Bank must focus all its attention on ensuring that the Funding for Lending Scheme gets resources through to viable companies, and on shoring up business confidence."
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