Birmingham Chamber of Commerce Group has urged the Bank of England’s Monetary Policy Committee to increase its quantitative easing programme.

The MPC is expected to extend its interest rate freeze at 0.5 per cent to three years on Thursday, but faces growing pressure to increase QE.

This would mean the purchase of more government bonds to boost money supply, which has been weak along with falling inflation.

Michael Ward, president of Birmingham Chamber, said: “It is vital that the MPC holds interest rates at their current historic low level as it is helping to boost our ailing economy by supporting investment.

“However the Chamber feels that the MPC should go further and increase its quantitative easing programme by at least £50 billion to £325 billion.

“Currently, with interest rates so low, there is little that the MPC can do to stimulate the economy other than expand its QE programme.

“The chamber believes that this would be the most prudent way to encourage the economy back into growth while business is still suffering from the impact of the eurozone crisis and weak domestic demand.”

Mike Ashton, spokesman for the West Midlands Chambers of Commerce, also supports an increase in QE.

He added: “Low interest rates have helped the UK’s struggling economy by making it cheaper for businesses to borrow money and by keeping down mortgage repayments and therefore keeping extra money in the consumers’ purse.”