DUBLIN – Bank of England Monetary Policy Committee member
David Miles has told an audience here that quantitative easing remains
a ‘powerful tool’ at the Bank’s disposal and ‘one which we may come to
use’.
But he also said that making additional asset purchases was not an
‘obvious’ choice at present.
“I think we’re in a good situation, where even though interest
rates have been effectively cut to zero, our options are not simply how
much do you tighten, I mean, you do have a tool, quantitative easing,
which I think Adam Posen coherently explained remains a powerful tool
and one which we may come to use. I think it’s very helpful that that is
the case,” he said.
Miles said he has yet to make up his mind on whether more QE would
be needed, adding that there is a risk monetary policy could be left too
loose, too long and that any decision on additional asset purchases
would depend on future economic data.
“It’s not obvious what the next direction for monetary policy is.
We face the difficulty of trading off these two big risks and as we get
more information about how things are playing out and where the risks
are moving. I think those are the things that will determine what we
do,” he said.
–London Bureau; tel: +44207 862 7492; email: wwilkes@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MSSFX$]
