September 5 2014.

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. While wage pressures are still weak and inflation is below target, calls for early interest rate rises are unjustified. A large number of people are working part time because they are unable to find a full time job – which contradicts the view that there is no spare capacity in the economy.

“The rise in sterling over the past eighteen months has put pressure on UK exporters, and is equivalent to a tightening in monetary policy. This adds to the case against premature rises in interest rates.

“The UK recovery is on track but there are still challenges up ahead. The eurozone, our largest export market, is stagnant and official figures show that manufacturing activity is at its lowest level since June last year. We must act with caution and ensure the recovery is not put at risk with unnecessary interest rate increases.”