The Bank of England’s Paul Fisher said in an interview with the Sunday Times that the bank could hold off on further quantitative easing if its new forward guidance plan works:
“I don’t think the need to rebuild balance sheets has gone away. If forward guidance gives more confidence it may be we can hold off QE until it falters or something else happens.”
Last month the bank’s governor, Mark Carney, said the bank didn’t plan to raise rates before unemployment fell to 7%, saying that would not be likely until 2016. Markets don’t seem to believe this ‘forward guidance’, though, taking yields higher.
Fisher suggests, though that households and businesses are “getting the message” but markets may need more persuading. He also said that stronger data and surveys in recent months suggested “policy is finally kicking in”.
