Interest rates will rise in May, says BCC

The Bank of England will raise interest rates from their historically low levels in May, the British Chambers of Commerce (BCC) predicts.

The group also downgraded its UK GDP growth forecast to 1.4% for 2011, lower than its December projection of 1.9%. David Kern, chief economist at the BCC, says: "Given the shift of opinion within the Monetary Policy Committee, we assume interest rates will increase from May.' However he warns any hike in rates could derail the recovery. "We believe this will be premature and risky in view of the fragility of the recovery and tough fiscal measures expected in the Budget."  The BCC adds the primary reason it downgraded its growth growth projection for 2011 was the unexpected 0.6% ...