Countering recession appears to be the main short-term priority

Commenting on the quarterly inflation report published today by the Bank of England, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“We agree with the Bank’s assessment that growth prospects will be weaker than they estimated in their last quarterly report. However, the projected recovery in 2010, and particularly 2011, still appears too strong.

“The report confirms that, notwithstanding the medium-term inflation risks, the main short-term dangers point to a sustained period of below target CPI inflation. We also believe RPI will stay in deflationary territory for some time.

“With this scenario in mind, the major policy priorities must remain on countering the recessionary pressures in the economy. The MPC should continue executing quantitative easing vigorously.”