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BCC: PREMATURE INTEREST RATE RISES COULD PUT UK RECOVERY AT RISK

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Date: 07/08/2014

BCC comments on monetary policy decision

Commenting on today’s Monetary Policy Committee (MPC) interest rate decision, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:

“The MPC made the right decision to keep interest rates and quantitative easing on hold. The UK’s economic recovery remains on track but is still facing challenges and this is not the time to put it at risk with premature rate increases. The current calls for higher rates, particularly while wage pressures are still weak, are unjustified. Official figures show that a large number of people are working part time because they are unable to find a full time job – refuting the view that there is no spare capacity in the economy.

“The rise in sterling over the past year has put pressure on UK exporters, and is equivalent to a tightening in monetary policy. This strengthens the case against premature on interest rate rises. To sustain business confidence, the MPC must deliver a clear and consistent message on the future path of interest rates.”