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SCC REACTION TO INTEREST RATE AND QE ANNOUNCEMENT

[ 09-07-2009 ]

Commenting on the decision of the Bank of England’s Monetary Policy Committee to keep interest rates on hold at 0.5% and continue with their current policy of quantitative easing, Garry Clark, Head of Policy and Public Affairs at Scottish Chambers of Commerce, said:

 
“This latest announcement by the Monetary Policy Committee signals no change in its current policy, despite concerns that its programme of £125 billion of asset purchases may need to be expanded if we are to stimulate increased lending and boost the cash available to businesses for investment.  However the Bank of England has made it clear that it intends to revisit this matter next month, just before the publication of its next quarterly inflation report.
 
“Quantitative easing was always going to be a controversial policy, with no guarantees that it would deliver the results our businesses and the economy needs.  However we believe that it can be made effective with the right will and investment.  All eyes will be on the next meeting of the Monetary Policy Committee to see how the asset purchase programme will be balanced against potential future inflationary risks.  The key factor for Scottish businesses will be whether or not they have detected improved borrowing facilities by then.”
 

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