LONDON (MNI) – Bank of England Monetary Policy Committee member Ben
Broadbent, who voted in favour of unchanged policy at the MPC’s June
meeting, says in a Reuters interview that the case for further stimulus
has grown.
Broadbent says the deterioration in business surveys across
wide swathes of the world and the headwinds from the Eurozone have added
to the case for additional stimulus, and he says there is a clear risk
that things could get worse.
“I would certainly say the case has grown since the May Inflation
Report for some sort of intervention,” Broadbent says.
He notes that business surveys have shown things getting worse in
Europe, the UK and the US.
In his Mansion House speech here last Thursday, BOE Governor Mervyn
King unveiled a trio of policies that are designed to bolster banks
liquidity, to curb their funding costs and bolster lending. Broadbent
said policymakers would have to consider the impact of these measures in
their decision making on QE.
The measures were announced just after the Spanish bank bailout and
before the Greek elections, with the euro area crisis intensifying.
“Clearly there is a risk that things could get worse, therefore the
timing of the policy measures flagged in last weeks’ Mansion House
speech is not a coincidence,” King said.
-London newsroom: 4420 7 862 7491; email: drobinson@marketnews.com
[TOPICS: M$$BE$]
