–QE Still Works – In Some Respects Not Same ‘Bite’ As Formerly
–Comments In Interview With Euroweek
LONDON (MNI) – The Bank of England Monetary Policy Committee could
do more quantitative easing – “technically”, says Deputy Governor Paul
Tucker – but it will depend on how the MPC views the risks to inflation.
In an interview with ‘Euroweek’ published this week, Tucker said:
“Technically we could do more. It’s just a question of what we
think the risk to inflation would be”.
Tucker said that the MPC would need to take into account the impact
of the UK Treasury/BOE’s new Funding for Lending scheme.
“I don’t think we should just have one option in these
circumstances, which is why we are pleased to have launched the Funding
for Lending Scheme”.
“We still think QE works, even if in some respects it does not have
the same bite it used to have. We essentially buy Gilts from long term
institutions”.
Tucker said that QE increased demand for sterling corporate bonds
and many more firms had issued in this sector since the launch of QE.
“Some have used the proceeds to pay back bank loans, which delivers
benign deleveraging,” Tucker added.
–London Newsroom: tel: +4420 7862 7492;
email:ukeditorial@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MT$$$$]
