BoE should implement more QE, policymaker says

12 June 2012

Another round of quantitative easing (QE) would be beneficial to the UK financial system, a Bank of England (BoE) policymaker believes.

Adam Posen, a member of the institution's Monetary Policy Committee (MPC), has insisted that "further asset purchases by central banks can improve the economic situation we are now in" as the country continues to battle with the effects of recession.

During a speech delivered at Barclays' Short End Rates seminar in London, Mr Posen admitted he had been "too optimistic" in voting against more monetary stimulus at the MPC's meeting in May.

The official went on to say it is now time for the BoE and other bodies to once again buy assets other than government bonds on the grounds that the economic recovery has "petered out in the UK and elsewhere".

Mr Posen warned that the risk of disorder in the eurozone has exacerbated the trend of an "excessive reluctance to invest".

By Gary Cooper

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