Further QE questioned as broad money lending shows growth
QUANTITATIVE easing (QE) is having an impact on the money supply, provisional September figures from the Bank of England suggested yesterday.
Broad money (M4) increased by £14.7bn, above the average flow for the previous six months. There was also a pick up in the lending of broad money, which rose 0.7 per cent in September on the previous month.
Although the annual growth rates for both measures fell, analysts said this was because distortions within the financial sector were boosting the figures this time last year.
While this better data might deter the Bank from extending QE, Capital Economics’ Vicky Redwood said: “With such a severe fiscal squeeze looming, there remains a good case for keeping monetary policy loose and in fact extending QE further.”