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BANK’S INFLATION REPORT HIGHLIGHTS NEED TO TACKLE THREATS TO RECOVERY

[ 10-08-2011 ]

Commenting on the Bank of England’s Quarterly Inflation Report, Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said: 

 
“It is unsurprising that the Bank of England has downgraded its growth expectations for 2011 but their assertion remains that the economy will pick up in 2012 and 2013, largely as a result of a boost in consumer demand and business investment.  This is a fairly risky assumption, which is based on the increased availability of bank credit and falling costs in the medium term.  In addition the Bank has not factored in the potential effects of the current crisis in the Eurozone, which could further damage confidence and reduce external trading opportunities. 
 
“Economic prospects for the remainder of 2011 look to be extremely challenging, with rising inflation and energy costs in the short term.  Our hope is that we will weather this storm and emerge stronger in 2012.  If we are to do so, it is important that the Bank of England maintains a strong policy to guard against downside risks, keeping base rates low well into 2012 and giving serious consideration to a further extension of Quantitative Easing sooner rather than later.”

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