DNCC Comments on MPC Decision

The Bank of England's Policy Committee (MPC) today decided to hold interest rates steady for the month and maintain the current level of Quantitative Easing (QE), which has now pumped £200bn of fresh money into the economy.

George Cowcher, Chief Executive of the Derbyshire and Nottinghamshire Chamber of Commerce, said: "Economic growth at the back end of 2009 was extremely lacklustre and the Bank of England has already lost face over its inflation targets, so it comes as no surprise that the MPC has taken a cautious approach this month, with regard to both interest rates and Quantitative Easing.

"The further hold in interest rates is welcome and it looks highly likely that rates will stay down at 0.5% until the end of the year and possibly beyond.

"However, while there is no current need to increase the Quantitative Easing programme above £200bn, it is very important for the MPC to maintain an expansionary position. Given the underlying weakness of the economy, emphasised by the recent disappointing GDP figures, it would be premature to close the door completely on the QE stimulus.

"The primary focus needs to be on ensuring we avoid a double-dip recession. Closer control of Government spending will be key in reducing inflationary pressures, while moves to improve cashflow and provide businesses with easier access to finance will play a vital part in getting the economy moving again."

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