LOUISE Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said the tug-of-war between controlling inflation and the need to kick-start the economy was weighing heavy on the Monetary Policy Committee.
The Bank of Englands MPC pegged interest rates at 5% for the fourth month running and Bennett said it has come as no surprise.
She said: We may see this policy of no action for months to come unless something changes, either in terms of inflation or the economy suddenly leaping into action.
Neither looks plausible at the moment so we can only expect to see more of the same from the MPC, possibly until the end of the year.
We have argued that there needs to be a drop in interest rates because we feel the slowing economy is a more pressing issue.
We dont underestimate the need to keep a lid on inflation but I am not sure a quarter per cent cut in rates would cause a mass spending spree that would drive up prices. It may, however, just lift some of the gloom.
"Those conflicting pressures may well be reflected in the minutes of the MPC meeting when they are released in the coming weeks.
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