SCC Comment on Interest Rates

Commenting on the decision by the Bank of England's Monetary Policy Committee to keep interest rates on hold at 0.5% and QE on hold at £325 billion, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

'No-one should underestimate the challenge facing the Bank of England as it strives to deal with monetary policy right now.  On the one hand inflation, though it has fallen for much of the past six months, remains stubbornly above target.  On the other, sterling has recently strengthened against the Euro and other currencies, which could make our exports less competitively priced than they have been for some time.  This has left monetary policy firmly wedged between a rock and a hard place.

'The most useful thing the Bank could do right now is to explore ways of taking more direct action to free up the supply of credit to small and medium businesses, for whom cash flow continues to be an issue, perhaps by using QE to purchase private sector assets.'