The British Chambers of Commerce (BCC) has called for further quantitative easing (QE) to help shore up the UK economy.
David Kern, chief economist at the BCC, says UK monetary policy “must remain as expansionary as possible” in the current climate.
He says: “The disappointing forecast issued by the Office for Budget Responsibility (OBR), with a prediction of negative growth in the current quarter, shows how important it is for the government to introduce measures which will help to stimulate the economy.
“Given the current economic challenges, we believe that the Monetary Policy Committee should announce a further £50 billion increase in the QE programme on Thursday, to £325 billion.”
Kern believes further QE stimulus would strengthen confidence and counter the “downbeat mood” following recent projections by the OBR.
He adds: “But QE on its own will not achieve its full potential to support growth. Effective measures aimed at improving the flow of credit to viable businesses must be introduced as a matter of priority.
“The government should also act quickly to implement the credit-easing measures announced by the chancellor in the autumn statement.”
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