BoE to reactivate bond purchases?

6 October 2011

Emergency bond purchases may be reactivated by the Bank of England (BoE) as officials decide whether or not a first stimulus increase in two years is required.

The talks come as the European debt crisis continues to take hold and budget cuts begin to be felt.

According to a Bloomberg News survey of 32 economists, more than one-third of those questioned said they expect to see an expansion of bond purchases - which included an official each from Societe Generale and HSBC Holdings, whose shares belong to more than 221,000 shareholders - while the remainder predicted this will be put off until a later date.

Neil Mackinnon, an expert at VTB Capital, said it is a matter of when, rather than if, regarding a bond-buying uptake.

The industry figure explained: "Markets and the global economy are in a precarious state and the situation has escalated. Whether central banks have the luxury of waiting is very debatable."

By Gary Cooper

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