London (MNI) – There is no way of knowing if the stg75 billion in
further quantitative easing launched by the Bank of England Monetary
Policy Committee at its October meeting will prove to be the right
amount, MPC member David Miles said in a Q and A Monday.
Miles said what happens in the euro area would be a key factor in
determining MPC policy going forwards, taking questions at a Royal
Economic Society event.
Miles said all the MPC could do what aim to balance supply and
demand in a way that was compatible with its 2.0% inflation target.
“We will be effected, no doubt at all, by conditions in the wider
world and Europe in particular,” Miles said.
“But I don’t think we are powerless,” he added.
Asked if the stg75 billion could prove to be too much, Miles said
“Is stg75 billion too much ? I don’t know. Part of the reason why we
meet once every month … is a lot happens from one month to the next.”
“I honestly couldn’t predict now what I think the right thing is
to do at the next meeting will be let alone two or three months down
the road,” he said
“I may be that 75 continues to look the right number or it looks
too big or it looks too small,” he added.
Miles also said in the Q and A that quantitative easing would have
a wealth effect and boost capital gains, even if there was no impact on
the bank funding channel.
–London Bureau; Tel: +7862 7491; email:drobinson@marketnews.com
[TOPICS: M$$BE$]
