Bank of England monetary policy committee member Martin Weale says the argument for extending the Bank’s quantitative easing programme has strengthened after the economy slipped back into recession.
Figures from the Office for National Statistics, published earlier this week, shows the UK economy shrank by 0.2 per cent in the first quarter of 2012 following a fall of 0.3 per cent the quarter before.
The QE programme currently stands at £325bn and the latest round of £50bn is expected to complete this month.
Minutes from this month’s MPC meeting show David Miles was the only member to vote for an expansion of monetary policy after fellow MPC member Adam Posen, who has consistently argued for an expansion, voted to keep the size of the programme the same.
Speaking to BBC Radio Newcastle yesterday, Weale said the case for increasing QE had strengthened after news that the country had entered its first double-dip recession since 1975.
He said: “I am certainly feeling that the argument is stronger than it would have been if the economy had shown economic growth. I do not want to come to a decision now. It is a decision I will come to.”
Weale added he “could not imagine than an increase in interest rates would provide support to the economy” and that QE is the only policy open to the committee.