Birmingham Chamber of Commerce Group yesterday urged the Bank of
England's Monetary Policy Committee (MPC) to increase its
Quantitative Easing (QE) programme this week.
The MPC is expected to extend its interest rate freeze at 0.5
per cent to three years on Thursday but faces growing pressure to
increase QE. This would mean the purchase of more government bonds
to boost money supply, which has been weak along with falling
inflation.
Michael Ward, president of Birmingham Chamber, said: "It is
vital that the MPC holds interest rates at their current historic
low level as it is helping to boost our ailing economy by
supporting investment.
"However the Chamber feels that the MPC should go further and
increase its Quantitative Easing programme by at least £50
billion to £325 billion.
"Currently, with interest rates so low, there is little that the
MPC can do to stimulate the economy other than expand its QE
programme. The Chamber believes that this would be the most prudent
way to encourage the economy back into growth while business is
still suffering from the impact of the eurozone crisis and weak
domestic demand."
Mike Ashton, spokesman for the West Midlands Chambers of
Commerce, also supported an increase in QE and added: "Low interest
rates have helped the UK's struggling economy by making it cheaper
for businesses to borrow money and by keeping down mortgage
repayments and therefore keeping extra money in the consumers'
purse."