BOE Posen: When Inflation, Growth Too Low MPC Had To Act

LONDON (MNI) – The Bank of England’s Monetary Policy Committee took
the view it had to relaunch quantitative easing because growth and
inflation were too low, MPC member Adam Posen says.

Posen’s comments, to the Blackpool Gazette, clearly refer to the
inflation outlook – as the most recent print shows CPI at 5.2%, more
than 300 basis points above the MPC’s inflation target.

In the interview Posen described QE as a normal form of monetary
policy. The MPC agreed to an extra stg75 billion of QE.

“It’s (QE is) really just trying to do the normal monetary policy
job when rates are really zero per cent and the banking industry in a
mess,” Posen said.

“The whole committee came around to the idea – when inflation is
too low and growth is too low we need to act. We’re looking five years
ahead and trying to make the right decisions,” Posen added.

MPC members are on a regional tour of the north west, and have
given a raft of interviews to local media.

–London newsroom: 4420 7 862 7491; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,M$$BE$]