Bank Shows Concern at State Of UK's Economy
Sector: Banking & Finance
23rd July 2010
Bank of England policymakers considered further action to boost the economy this month amid concerns over the UK recovery, it emerged yesterday. Minutes of the bank's July interest rates meeting showed the monetary policy committee (MPC) looked at the need for more quantitative easing (QE) and said the Chancellor's Budget had hit the outlook for UK growth. The MPC also noted signs that the global recovery was running out of steam. Members opted to keep rates and QE on hold, although the minutes confirmed the latest call by member Andrew Sentance that rates should be raised by a quarter point to rein in inflation.
Details of the MPC's discussion of more help for the economy follow comments on Tuesday from committee member Adam Posen stating that there was a "more than 50 per cent" chance of extending QE. Economists said the details of the meeting suggest interest rates are to remain at 0.5 per cent until well into 2011. James Knightley, at ING Bank, said: "With US and eurozone rather than inflation, the Bank is unlikely to act early and aggressively. We forecast the first rate hike for the third quarter of 2011." Vicky Redwood at Capital Economics said the minutes gave "the clearest steer so far that more QE could yet be on the agenda". The Bank has held QE at £200 billion since the last £25bn increase in November. In Tuesday's interview, Posen said the committee's inflation projections indicate "more than 50 per cent likelihood in my estimation the right next move will be to loosen rather than to tighten" monetary policy.
The MPC is waiting for its ninth member, Martin Weale, to join in time for the August.
Source: Times
News Archive
27th October 2011
Visa profits jump 14pc as Consumers opt for Plastic
Visa's fourth-quarter profit rose 14pc, as cardhol...
30th September 2011
NBNK bids £1.5bn for Lloyds Branches Despite Cost of Credit
Lloyds Banking Group's attempt to drum up a compet...
20th September 2011
UBS under Pressure to Hive off parts of Business following Rogue Trader
Pressure is growing on UBS to hive off parts of it...