Economist expects quantitative easing extension
Mon, 02 Nov 2009
The Bank of England Monetary Policy Committee (MPC) is likely to inject more cash into the economy when it meets this month, a leading economist has claimed.
Vicky Redwood, UK economist at the research consultancy firm Capital Economics, believes that the Bank of England will increase its quantitative easing programme in light of the most recent gross domestic product figures.
Last month, the Office for National Statistics surprised many commentators by announcing a 0.4 per cent contraction in the economy for quarter three, meaning the UK is now in the longest recession since records began in 1955 - six consecutive quarters.
Ms Redwood commented: "The key is the upcoming November meeting, which is when the Bank said it is going to revisit its quantitative easing programme.
"I think there is a good chance that they will extend that programme further particularly in light of the GDP figures."
At the last meeting of the MPC on October 8th, the Bank decided to hold interest rates at 0.5 per cent and continue with its programme of asset purchases totalling £175 billion, financed by the issuance of central bank reserves.
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