Signs of recovery merit no increase in QE scheme

CITY A.M.’s board of economists has voted 8-1 against any increase in quantitative easing (QE) again. 

 

Last month our shadow monetary policy committee (MPC) was nearly in line with the Bank of England’s own, with the same voting result. All of the Bank’s panel rejected further QE. 

 

There was a mix of advice for new governor Mark Carney ahead of his inflation report next week, which will also report back on the possibility of adopting new policy tools, like the Federal Reserve’s unemployment threshold. 

 

No members advocated a cut in interest rates, but neither do any yet think the economic recovery is clear enough for a hike.

 

The MPC will announce its decision on rates and QE today, while the inflation report will not be released until next week, on the 7 August.