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Wednesday, 22 December 2010

Chamber Reacts To Monetary Policy Minutes

Responding to the Bank of England’s Monetary Policy Committee minutes released today, Dr Brian Sloan, Head of Business and Economic Policy at Greater Manchester Chamber of Commerce, said: “As we expected the Bank voted 7-2 in favour of keeping interest rates at the record low of 0.5%, with Adam Posen arguing that the asset purchase programme should be increased and Andrew Sentance looking to increase the Bank’s rate to 0.75%.

“The Chamber believes that the decision to stick with a rate of 0.5% is the right one at this time to avoid undue stress on business and household finances ahead of the New Year’s tax rises and spending cuts. In our release on the day of the interest rate decision this month we did however warn that due to the current level of inflation the Bank’s attention would start to focus on potential wage increases. Paragraph 23 of the minutes makes it clear that this is on the radar and sustained pay increases could raise medium term inflation."

The Chamber is looking to assess the likelihood of intentions to increase pay and is asking businesses to provide their feedback by clicking here

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