Monetary Policy Committee holds first meeting of 2013

Christian Spence, Research Manager at Greater Manchester Chamber of Commerce

The Bank of England’s Monetary Policy Committee is holding its first meeting of 2013 on 9 and 10 January.

Christian Spence, Research Manager at Greater Manchester Chamber of Commerce, said: "We expect that they will hold interest rates at 0.5% and quantitative easing at £375bn.

"Whilst we are expecting the GDP figure for the fourth quarter of 2012 to be weak and possibly negative, there will be renewed calls for further asset purchases in the near future. We hold the opinion that the Bank should not commit to any further asset purchases in their current form as the risk of continued inflation throughout 2013 remains high.

"Consumers continue to be squeezed by real-terms wage decreases and so consumer spending will remain under pressure for the rest of the year. We made many calls for the quantitative easing programme to be used to invest directly in regional programmes, particularly infrastructure, and we would urge the Committee to focus its attention on the wider economy outside London and the South East and seek to drive growth within the regions as a matter of priority."