By Claire West
Commenting ahead of the MPC’s August meeting this Thursday, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“It is clear that quantitative easing is not yet fully effective, and we urge the MPC to step up the pace. The size of the programme should be increased without delay, well beyond £125 billion, and the proportion of corporate paper purchased by the Bank should be raised.
“Money supply held by businesses is not growing fast enough and bank lending to companies has recorded outright declines in recent months. V iable small firms are often finding it difficult to access credit.
“The UK economy is now at a critical turning point and talk of recovery is premature. Despite some positive developments, we must not be lulled into a false sense of security. Although the recession is moderating, the MPC must act forcefully to counter the serious risk of a relapse.”