Commenting on the Bank of England's MPC decision yesterday, Ian McCafferty, CBI chief economic adviser, said: "The economy is stabilising but still faces some serious headwinds, and recovery remains shallow-rooted. However, near-zero interest rates, the existing £200 billion QE package and the sharp fall in Sterling are already extremely expansionary, and inflation has exceeded expectations consistently in recent months.
"As the economy recovers the bank will have to start to think about returning monetary conditions towards more normal levels. We would expect this to lead to a small rise in interest rates around the middle of this year."
