Bank of England wrong to continue policy of quantitative easing, says IEA expert
IEA research cited in The Telegraph
Julian Jessop quoted in The Telegraph
“The Bank of England’s decision to maintain its existing programme of money printing means that it is keeping the foot on the accelerator despite mounting evidence that the UK economy is overheating.
“Most members of the Monetary Policy Committee have judged that the news of stronger inflation has been offset by signs of a slowdown in the growth of activity. This is fair enough, but may still be complacent.
“The Bank is only expecting consumer price inflation to be ‘slightly above 4 per cent’ in the fourth quarter, despite growing upside risks. The slowdown in activity also appears to be due mainly to problems on the supply side, rather than a lack of demand. A prolonged period of above-target inflation would add to the squeeze on real incomes and undermine the credibility of the Bank itself.
“The Shadow Monetary Policy Committee, a group of independent economists which meets at the IEA, has been arguing for some time that the Bank should end its policy of quantitative easing at the earliest opportunity. The official MPC has missed that chance today”.
Notes to editors
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