BoE Bond Plan will increase by mid next year

The Bank of England will have to increase its asset purchase plan in mid-2011 due to the risks of a "setback" for economic growth, the British Chambers of Commerce said.

The Monetary Policy Committee will increase its bond program for 50 million pounds ($ 78,500,000,000) to 250 million pounds, the CBC said in a report released today by e-mail in London. The economy will grow 1.8 percent this year, 1.9 percent in 2011 and 2.1 percent in 2012, predicted by the lobby group.

"The MPC may be reluctant to increase due to quantitative easing concerns about inflation," said the BCC's chief economist David Kern in a statement. "But there is a strong case for easing monetary policy further at a time when fiscal policy is being tightened."

Bank of England policymakers were split three ways if to fight inflation by increasing interest rates or add stimulus to promote economic expansion. fiscal control agency of the government last week cut its growth forecast for next year as the government prepares to implement deeper cuts in spending since World War II.