Economy Needs Further Quantitative Easing

Bank of England policymaker, David Miles, has said during an interview, that Britain needs a “substantial” amount of quantitative easing to jump-start its stalled economy.

Mr Miles was one of the policymakers alongside the Bank of England’s governor, Sir Mervyn King that voted for a third round of monetary stimulus; and he has again reiterated his support for a cash injection of at least £50 billion.

During his recent interview, Mr Miles is quoted as saying: “Do we need a more expansionary monetary policy? ‘Yes’. Should it be a substantial change in asset purchases? ‘Yes’.

“Is 50 billion pounds a substantial number? ‘Yes it is’. Could one know in advance what is exactly the right amount to do? ‘Absolutely not’.”

However, the Bank of England policymaker also said he could not “see any reason for thinking” that Britain’s recovery had been curtailed by the governments austerity measures, aimed at reducing the budget.

Mr Miles added: “A pretty substantial increase in the costs of funding for most UK banks then got passed through in the form of some increases in the costs of lending to corporates, and pretty clearly some increase in the costs of mortgages.

“That has been pretty unhelpful.”

Later this week a third revision of first quarter GDP is set to be released; which is widely expected to confirm that the UK is in a double-dip recession.