MPC must persevere with low interest rates

"Despite some welcome signs of improvement in the economy, growth remains modest and fragile, and businesses still face serious obstacles. The threat of a double-dip recession is particularly acute at this early stage of the upturn, and the precarious eurozone situation, alongside upheavals in global financial markets, increase risks to the UK.

“The MPC will only be able to maintain low interest rates for a prolonged period if the Chancellor presents a credible medium-term plan for tackling the UK’s deficit in this month’s Budget. Putting the country’s public finances on a sound footing will reduce threats to our credit rating and to inflationary expectations, and it will help create the stable background businesses need to drive recovery.”

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