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More QE in February, says Capital Economics

Economic research consultancy Capital Economics believes the Bank of England’s Monetary Policy Committee will initiate another round of quantitative easing in February next year.

The committee first initiated a £75bn bond purchasing programme on March 5, 2009. This most recent change to the size of the programme, on November 5, 2009, was an increase of £25bn, bringing the total to £200bn.

In a note published today, Capital Economics chief European economist Jonathan Loynes says: “With inflation still high and likely to remain so for a while, and some MPC members having only just stopped voting for tighter policy, it could take a little while for Adam Posen to persuade a majority of members to back his longstanding call for additional bond purchases.

“Given this, for now we have pencilled in another £50bn of bond purchases beginning in February next year.”

However, he did state this might occur earlier if the economy continues to remain as week as it has in recent weeks.

The note also echoed Capital Economics’ previous prediction that rates will remain on hold until mid-2013.


Strength in diversity

James Smith reports that the flexible and disparate nature of the global bond sector has brought strong returns over recent years

Mark Harris joins Eden Financial

Eden Financial has appointed former Henderson head of multi-manager Mark Harris to jointly manage the company’s existing multi-asset fund, Money Marketing can reveal. He will co-manage the £66.6m CF Eden global multi-strategy fund alongside Chris Jaques and is joining on September 12. Jaques currently runs the fund for the private client side of the Eden […]

US banks offered deal over mortgage bond lawsuits

Big US banks in talks with state prosecutors to settle allegations of misrepresenting the quality of mortgage securities have been offered a deal which proposes to limit their legal liability in exchange for a multi billion-dollar payment. Five people with knowledge of the discussions told the Financial Times state prosecutors are proposing to effectively release […]

Policymakers steer clear of macroeconomic banana skins

The Jackson Hole summit has traditionally been seen as a way to pick up the central threads of economic debate and search for clues over the future direction of policy. That it is now seen as potentially crucial for maintaining confidence in equity markets demonstrates just how far the credit crisis has shaken faith in […]


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