Ignis economist predicts QE3
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Ignis chief economist Stuart Thomson has predicted that the Bank of England will launch another round of quantitative easing in February 2012.
The programme announced last week, worth £75bn, will take four months to complete and will be split between the three gilt durations of three to 10 years, 10 to 25 years and 25 years or more with a run rate of £1.7bn per sector per week. Thomson says: “The four-month programme and dismal economic outlook virtually guarantees another round in February, where we believe the MPC will agree another £75bn with the eventual size of the program matching QE1’s £200bn.” He says there will not be a swift return to pre-credit crunch growth and that the UK economy will experience a decade of lost growth with real activity averaging just 1 per cent as the economy deleverages.
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