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Double-dip shows QE boost is the right strategy, says MPC duo

Bank of England monetary policy committee member Martin Weale told BBC Radio Newcastle last week the case for increasing quantitative easing is stronger after news the economy has slipped back into recession.

MPC member David Miles was the only committee member to vote for an increase to the £325bn QE programme last month and he told Bloomberg Television last week: “The weakness of demand, given the amount of spare capacity in the economy, still made a strategy of having monetary policy even more expansionary the right one. On reflection, that seems the right strategy.”

Miles added inflation, up from 3.4 to 3.5 per cent in February, would be higher than expected in the near term but is likely to fall below the BoE’s 2 per cent target by the end of the year.

He said: “The inflation outlook in the very near term is for slightly higher inflation than I had thought but the bigger picture remains one where the domestically generated inflation pressures in the UK are low. More likely than not, inflation will go back to the target level and quite likely sit beneath it if you look beyond the next six to nine months.”

Miles had called for the QE programme to rise by £25bn to £350bn.

Fellow MPC member Adam Posen voted to keep QE at £325bn despite having urged for QE to be increased since joining the MPC in September 2009.

Emba group sales and marketing director Mike Fitzgerald says: “The economy is not getting any better, so I see no other option but to offer more support in the form of QE.”



Alan Lakey: The RDR Titanic story

Titanic fever seems to have gripped the nation, or at least the media, and we have endured a barrage of connected and non-connected nonsense including themed crosswords and a plethora of TV programmes. Karl Marx said: “History tends to repeat itself…the first time as tragedy, the second time as farce.” This gave me pause to […]


FSA fines adviser firm for client money failings

The FSA has fined financial planning and portfolio management firm Christchurch Investment Management £26,600 for failings in relation to the protection of client money. The firm’s compliance office David Thornberry has also been fined £11,550 and has been banned from acting as a compliance officer or having responsibility for client assets. This is the first […]

Absolute return

Deleverage climate yields prospects Paul Brain, manager, Newton global dynamic bond fund The process of deleveraging across the developed world continues to present significant risks to the global economy, with central banks compelled to keep monetary policy extremely loose to offset the effects of aggressive fiscal austerity measures. This dichotomy of potentially inflationary and deflationary […]


Pru sets out adviser charging plans

Prudential has set out how it plans to facilitate adviser charging, including the products that will offer adviser charging and when deductions will be taken. Pru says it will offer adviser charging on its guaranteed pensions annuity, income choice annuity, flexible retirement plan including drawdown, and trustee investment plan. The Prudence inheritance bond, the Prudential […]


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