BOE Governor King is on the wires saying that the MPC may need to move beyond just using interest rates to manage the economy and may have to resort to buying assets, what is often referred to as quantitative ease. Asset buying can begin in weeks, not moths, the Governor said.
He says there is a risk inflation will undershoot target despite big rates cuts. On the bright side, lower oil prices and the fall in GBP may boost demand.
GBP/USD has fallen back to 1.3900 but is holding above session lows at 1.3860 as King preares the market for a new phase of monetary stimulus and continues to show no concern over the weak state of the pound.
