MPC "paving the way" for quantitative easing

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MPC "paving the way" for quantitative easing

Tue 3rd Mar 2009

The Bank of England's monetary policy committee (MPC) is already preparing for the introduction of quantitative easing, it has been claimed.

Experts have been calling on the central bank to help tackle the recent economic crisis through quantitative easing, whereby the bank prints more money, but so far the bank has been reluctant to do so, preferring instead to slash interest rates in the hope of fostering growth.

However, with the base rate at an all-time low of one per cent and the cuts of the past six months failing to stop the country heading into recession, it has been claimed that now is the time to look to printing more money.

Howard Archer, UK chief economist for financial analysts IHS Global Insight, said: "The Bank of England's MPC members have been wheeled out over recent weeks and I think they are definitely paving the ground for quantitative easing."

He pointed to comments made by MPC member Andrew Sentence, as well as head of the Bank of England, Mervyn King, over recent weeks that suggest the committee is planning to introduce quantitative easing in the near future.

The US Federal Reserve has already begun quantitative easing to help underpin president Barack Obama's plan to boost the US economy.

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