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— Posen: IMF Report On UK Not As Rosy As Many Suggested
LONDON – Bank of England Monetary Policy Committee member
Adam Posen has said that while his central view is more quantitative
easing is required it is ‘by no means a foregone conclusion’.
In a 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.
Turning to the recent IMF Article IV report on the UK economy and
the coalition government’s austerity plans, Posen said that it was not
as rosy as many commentators have been suggesting.
“If you look at the outlook, the forecasts they have for the UK is
actually lower than what the government has been saying, not enormously
lower, but meaningfully lower,” he said.
“They could imagine developments or shocks that could leave the
government having to reconsider the extent of the austerity program. We
hope that isn’t what happens as that would mean that things have gone
bad,” he said.
“It is pushing it to say it was a rosy picture from the IMF. If
anything, it was more measured and cautious than what we have been
hearing so far. The forecast is actually a little more negative, not
bad… it’s possible things could go wrong,” he added.
–London newsroom: 4420 7 862 7492; email: wwilkes@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MABPR$,MT$$$$]
