SHADOW MPC members forecast the monetary policy committee (MPC) would hold fire on rate cuts and increased asset purchases (QE) when it votes on policy today, while the effects of last month’s QE and funding for lending (FLS) filter through.
Only two of the nine shadow committee members predicted change, with Corin Taylor from the Institute of Directors calling for £75bn more quantitative easing and Vicky Redwood of Capital Economics urging an interest rate cut to 0.25 per cent.
Capital Economics analyst Samuel Tombs backed the consensus, saying it seemed likely “the MPC will stand pat this month and will wait to see whether FLS and the current planned asset purchases provide a decent boost to the economy.”
moo is representative of city feeling, pointing out that the Bank has recently warmed towards a rate cut, but ultimately concluding that the bank will probably hold off until later in the year.
“It seems [most] likely, though, that the MPC will stand pat this month and will wait to see whether FLS and the current planned asset purchases provide a decent boost to the economy,” Tombs said.
“We expect interest rates cuts and more asset purchases in November,” he added.