The Bank of England’s Monetary Policy Committee decided to take no action on interest rates (which remains at 0.5 per cent) or quantitative easing (no increase on £200bn) when it met today.


The move to leave interest rates unchanged was welcomed by the British Chambers of Commerce, which would, nevertheless, have preferred to see some more action on quantitative easing (QE).


Chief economist David Kern pointed out: “We believe there are strong arguments for injecting additional QE into the economy over the next few months. As VAT increases to 20 per cent in January, and the deficit-cutting programme moves to a higher gear in 2011, risks of a setback will inevitably worsen,” he said.


“While we support the painful measures needed to stabilise Britain’s public finances, every effort must be made to minimise the danger of a new economic downturn. In the foreseeable future, threats to growth will remain much more serious than the risks of higher inflation, and the MPC must act accordingly.”