LONDON – Bank of England Monetary Policy Committee member
Adam Posen has said that he made his call for further monetary stimulus
in order to ‘elicit a response’ from the public and economic
commentators.
“Part of the reason I put this stuff out to the public was to
elicit reactions from the general public, from commentators, from
business people, as well as my colleagues on the MPC,” Posen told ‘The
Press’ newspaper in York.
In an earlier recorded interview with the Yorkshire Post, Posen set
out the case for further monetary stimulus but stressed that no decision
has been taken on what to do next.
“I think it’s time for the committee to debate whether additional
quantitative easing would be needed, I think the committee needs to
decide two things. First, they’d have to decide that it would be needed,
which is by no means a foregone conclusion, in fact, they may even talk
me out of it,” he said.
“Second, how would we do it? Clearly, we can’t cut interest rates
further, so the feeling is the next step would me more quantitative
easing of the kind the bank pursued in 2009. But, again that’s for the
MPC to deliberate,” he added.
Posen said that it was his concern that inflation would undershoot
target and his fears for the long-term health of the UK economy that had
led him to call for more easing.
“We should be doing more, based on my best assessment forecast
right now, the risks are on the downside, not just for growth, but on
the inflation side,” he said.
“It’s not that I’m worried about a double-dip, it’s not that I’m
worried about another crisis, it’s more this long-term concern. I worry
about a longer period where we are not growing as fast as we could be,”
he added.
–London newsroom: 4420 7 862 7492; email: wwilkes@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MABPR$,MT$$$$]
