Analysts say more quantitative easing on way to arrest recession fears
With growth stunted by the collapse in consumer confidence amid the Government’s budget cuts and the eurozone debt crisis, the Bank’s Monetary Policy Committee (MPC) is believed to be poised to launch another round of quantitative easing (QE), or money printing.
Most economists now think the MPC will order more stimulus measures, with its meetings this Thursday, or the meeting scheduled for November, seen as the most likely times to act.
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Hide AdIt would be the MPC’s first change of policy since November 2009, when it opted to raise the level of QE by £25 billion to £200bn, or 14 per cent of GDP.
When the committee met last month, only one of its nine members voted for more QE but most said it was increasingly likely further monetary loosening would be justified.
Since then, fears over the global economic outlook have intensified amid mounting speculation that Greece will default and growing signs the slowdown is spreading to emerging economies, including China. Howard Archer, chief economist at IHS Global Insight, said it was “touch and go” whether more QE will be announced on Thursday, or if members will wait for a month when they are armed with its quarterly inflation report and third quarter GDP figures.