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Capital Economics: Bank’s QE programme to reach £500bn

UK Currency Pound 480

Capital Economics says the Bank of England is likely to boost its quantitative easing programme by £50bn in November and predicts QE will ultimately reach £500bn.

Earlier this month, the Bank of England’s monetary policy committee voted unanimously to maintain its quantitative easing programme at £375bn and hold base rate at 0.5 per cent. Members noted that further stimulus would “more likely than not to be needed” in the medium term.

UK economist Martin Beck says he expects the MPC to inject a further £50bn into the QE programme in November.

He says: “September’s monetary policy committee minutes did little to diminish the prospects of further policy stimulus over the coming months.

“We continue to expect further asset purchases to be announced at November’s meeting.”

Beck predicts the programme will eventually reach £500bn.

He says: “Over all, we still expect for QE to ultimately reach £500bn. And with the outlook for the economy remaining weak, we also think there continues to be a decent chance of an interest rate cut in November.”

AWD Chase de Vere head of communications Patrick Connolly says: “There is a very good possibility we will see further QE if required.”

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