LONDON (MNI)- Bank of England Monetary Policy Committee member
Adam Posen has said that the BOE should attack the longer-end of the
gilt yield curve with an additional round of stg50bln of asset
purchases to be made over the next three months.
In a speech in Gloucestershire, Posen said that with the global
economic outlook worsening, the bank should “arguably” make even more
asset purchases.
“So we should start with a minimum of stg50bln in gilt purchases in
secondary markets, tilted toward the longer-end of the maturity spectrum
over the next three months – arguably, given that the forecast appears
likely to turn worse due to external developments than the largely
domestic UK one I have based my call for more QE upon up until now, that
number should be Stg75 or 100bln,” he said.
Posen also called on other G7 banks to undertake more monetary
stimulus as there would be “less leackage of its macroeconomic impact.”
“But the UK can certainly do it alone, and cannot cause any global
commodity price bubbles by so doing. Runaway inflation is not on the
cards, so we should do more,” he added.
He also called for the establishment of a public bank dedicated to
lending to small businesses.
–London newsroom: 4420 7 862 7492; email: ukeditorial@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MABPR$,MT$$$$]
