LONDON (MNI) Bank of England Monetary Policy Committee member Adam
Posen has said that the Bank of England must remain ahead of the curve
as it attempts to chart a course through the ongoing economic storm
currently battering global financial markets.
“Things are moving that fast in a downward direction that we have
to be one step ahead in terms of policy,” Posen told the Lancashire
Evening Post during a regional visit here.
The Bank of England Monetary Policy Committee united at its October
meeting behind the decision to inject a further stg75 billion into the
economy through asset purchases, according to the minutes of that
meeting, released today.
All nine MPC members voted in favour of a further stg75 billion in
QE, with the minutes revealing some thought that a larger amount may be
warranted. The MPC considered asset purchases of between stg50 bln and
stg100 bln, but concluded that the differences in scale of QE were
outweighed by uncertainty over the inflation outlook.
While most analysts had expected a unanimous vote, some had
speculated that there would be one dissenter, most probably BOE Chief
Economist Spencer Dale. The minutes, however, revealed that the MPC
believed there was a “compelling” case for more QE, with the economic
outlook having deteriorated.
“The weaker outlook for, and increased downside risks to, output
growth meant that the margin of slack in the economy would probably be
greater than previously thought. This made it more likely that inflation
would undershoot the 2% target in the medium term,” the minutes said.
–London newsroom: tel+44 207 862 7491; email:
wwilkes@marketnews.com/drobinson@marketnews.com
[TOPICS: M$$BE$,MT$$$$]