UK economy needs £50bn more QE – MPC member

The Bank of England should pump £50bn more into the “stalled” UK economy to kick start the recovery, according to UK Monetary Policy Committee member David Miles.

Miles said a substantial third round of emergency bond buying would trigger a recovery.

In an interview with the Financial Times, he said: “Do we need a more expansionary monetary policy? ‘Yes’. Should it be a substantial change in asset purchases? ‘Yes’. Is £50bn a substantial number? ‘Yes it is’.

“Could one know in advance what is exactly the right amount to do? ‘Absolutely not’.”

According to the FT, Miles voted for additional QE at this month’s meeting of the Monetary Policy Committee (MPC), along with three other members including governor Mervyn King.

Meanwhile, the world’s central banking supervisor has warned the Bank of England is putting the UK economy at risk by persisting with low interest rates and money printing, according to the Daily Telegraph.

In its annual report, the Swiss-based Bank for International Settlements (BIS) said policy decisions could also be holding back growth by masking lenders’ bad debts and deterring them from cleaning up their balance sheets.

“Prolonged and aggressive monetary accommodation may delay the return to a self-sustaining recovery,” BIS said. “It can determine the perceived need to deal with banks’ impaired assets.”

 

This article was first published on IFAonline


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