By Claire West
Commenting on the choices facing the Monetary Policy Committee (MPC) at its August meeting next Thursday, David Kern, Chief Economist at the British Chambers of Commerce, said: “Despite good news that the UK’s GDP growth accelerated in the second quarter, there is no room for complacency".
"The tough emergency budget measures, while necessary to stabilise the public finances, will inevitably increase the risk of an economic setback. Worrying signs that the global economy may also be slowing only heightens the threats facing the UK".
“Considering all the risks, it is vital that the MPC keeps interest rates as low as possible, for as long as possible. Any thought of raising interest rates must be rejected until the recovery is much more secure".
"If the economy shows signs of renewed weakness, the MPC should consider raising the quantitative easing programme above £200 billion. Countering the threats to the recovery must be given the highest priority at the present time.”
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