Bank of England monetary policy committee external member Adam Posen says he is considering voting for more quantitative easing at the next MPC meeting.
The MPC voted to expand the asset purchase scheme by £75bn in September and £50bn in February, bringing the total programme to £325bn.
In an interview with MNI Deutche Börse Group last week, Posen says this has had less of an effect on mortgage interest spreads and SME lending than he expected.
Posen and fellow external MPC member David Miles voted to increase QE by £25bn in March but the remaining seven members voted against it. Posen voted against further QE in April and is thought to have voted against it in May’s meeting, the minutes of which are yet to be released.
He says he may join Miles in calling for another round of QE next month.
He says: “I had been hopeful in the last few months that after we an additional £125bn of QE that was getting close enough. Now I am debating whether I was premature to think that.
“I have had to downgrade my estimate of the bang per pound of this last round of QE from what I thought it was going to be and that is one of the major components of why I am less optimistic now than when I started to vote for no change in policy.”
Wealthflow partner Duncan Glassey says: “There is no easy solution to this, so it is good he is reviewing his position.”
Posen’s three-year term on the MPC ends in August when he will take up the role of president at the Washington-based research institution the Peterson Institute for International Economics.