Bank has appetite for further QE, minutes suggest
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The Bank of England’s recent Inflation Report suggests an appetite for further quantitative easing (QE), commentators claim.
In the minutes of the latest monetary policy meeting, it is revealed that all nine members of the Monetary Policy Committee (MPC) voted in favour of increasing the Bank’s asset purchase programme.
Seven of the committee’s members voted in favour of a £50 billion boost to QE, which was ultimately carried out. The remaining two – Adam Posen and David Miles – wanted a £75 billion increase.
Howard Archer, chief UK and European economist at IHS Global Insight, says the minutes “suggest that the door remains open for more quantitative easing should the economy struggle for sustained growth over the coming months”.
Archer claims “additional QE is more likely than not”, despite the view of some committee members that an argument could be made for making no changes to monetary policy.
Vicky Redwood, chief UK economist at Capital Economics, says: “The committee’s forecasts are still based on optimistic expectations for GDP growth.
“We doubt that these will be met, meaning that more QE will still be necessary to stop inflation undershooting its target.”
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