IMF: Britain should consider more QE

23 May 2012

Further quantitative easing (QE) should be under serious consideration within the Bank of England (BoE) should the British economic recovery continue to stutter.

That is the opinion of Christine Lagarde, managing director of the International Monetary Fund (IMF), who believes that while steps have been taken towards stabilising the nation's financial system recently, work still needs to be done.

The UK's economic plight is displayed clearly in the fact its gross domestic product contracted in the first quarter of the year, meaning the country is now officially back in recession.

Ms Lagarde explained that the government's approach to cutting debt levels has both reinforced the nation's credibility and put the budget on a more sustainable footing, but added that business and consumer confidence remain subdued.

With this in mind, she indicated that more fiscal easing from the BoE could be on the cards in the near future as this would help support growth and encourage employers to hire.

By Asim Shah

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