Business group welcomes Bank of England's unanimous vote to hold interest rates

The British Chambers of Commerce (BCC) has welcomed the latest decision from the Bank of England’s Monetary Policy Committee (MPC) to keep interest rates at 0.5%.

All nine members of the MPC voted to hold rates at the record low figure, where they have remained for over seven years.

David Kern, BCC Chief Economist, said: ‘The Bank of England’s decision to keep interest rates and QE on hold was unsurprising, despite the stronger than expected rise in inflation in March.

‘At a time when the UK economy is slowing, as highlighted by our recent Quarterly Economic Survey, and as major international organisations such as the IMF are downgrading their growth forecasts for the global economy, a key priority must be to persevere with the current low interest rates policy for the foreseeable future, while making every effort to boost growth.’

Earlier in the week, the BCC reported in its Quarterly Economic Survey that economic growth was ‘softening’ amid ‘global and domestic uncertainties’, including the EU referendum.

A statement from the Bank of England accompanying the decision suggested that instability ahead of the forthcoming vote has begun to weaken the UK economy.

It said: ‘There are some signs that uncertainty relating to the EU referendum has begun to weigh on certain areas of activity, as some decisions, including on capital expenditure and commercial property transactions, are being postponed pending the outcome of the vote’.

It added that uncertainty ‘might be affecting hiring decisions’, and that ‘the fall in commercial property transactions in the first quarter had been particularly striking’.