Hammond to decide on more QE "carefully and cautiously"

Jessica Morris
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Governor Mark Carney Presents Bank of England's Financial Stability Report
Carney previously hinted that he could extend his role until 2021 (Source: Getty)

Chancellor Philip Hammond said today that future decisions over whether the government will approve another round of quantitative easing (QE) to bolster the economy would be taken "carefully and cautiously".

His comments came a day after Prime Minister Theresa May acknowledged super-low interest rates and quantitative easing have "some bad side effects".

Speaking during a television interview with CNBC, Hammond said: "I approved a round of quantitative easing back at the beginning of August as a response to the shock that the economy had felt, but we are conscious of the impacts that QE has and we will use it carefully and cautiously."

The Bank of England recently cut interest rates to 0.25 per cent and increased QE by another £70bn to help economy following the Brexit vote. Governor Mark Carney has since said that the Bank's actions reduced its impact.

Hammond also called on Carney to spend an extra three years in his current role, rather than leaving early as had been agreed with former chancellor George Osborne.

"He will make his decision in due course and that's his decision," Hammond told Sky News.

"But I certainly would welcome his decision to stay if that is the decision he makes."

Asked on Thursday about how long he would like to stay, the governor declined to comment.

The Canadian has hinted that he could extend his role until 2021, however he will not announce a decision until later this year.

Carney has previously cited "personal and professional reasons" for not serving the full eight-year term.

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