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CITY A.M. SHADOW MPC

<strong>ALLISTER HEATH CITY A.M.</strong><br />&ldquo;Interest rates need to remain on hold, as does QE. The money supply, when measured properly, is showing signs of slightly better growth. With GDP now growing again, the Bank should wait and see.&rdquo;<br /><br /><strong>SIMON WARD HENDERSON NEW STAR<br /></strong>&ldquo;Hold. Broad money trends look a bit better than last month and velocity is probably rising. Cutting interest on bank reserves would undermine the anchor role of Bank rate and have little impact on lending behaviour.&rdquo;<br /><br /><strong>GEORGE BUCKLEY DEUTSCHE BANK.</strong>&rdquo;<br />&ldquo;The impact of current policy settings on the economy is uncertain, and with the Bank having already eased significantly we would advocate a wait and hold approach for now.&rdquo;<br /><br /><strong>JAMIE DANNHAUSER LOMBARD STREET RESEARCH</strong><br />&ldquo;Near-term growth could surprise on the upside but the MPC needs to look through such temporary effects as inflation risks are minimal. An extension of QE over the next couple of months should be seriously considered.&rdquo;<br /><br /><strong>TREVOR WILLIAMS LLOYDS TSB</strong><br />&ldquo;While the recession&rsquo;s severity is easing, it is not yet clear that recovery will be sustainable and growth in the money supply is too weak to support a strong recovery. Hold rates into 2010 or beyond and extend QE.&rdquo;<br /><br /><strong>HOWARD ARCHER IHS GLOBAL INSIGHT</strong><br />&ldquo;No change, but further action on QE could be needed. Despite a likely return to growth in the third quarter and signs of a pick up in money supply growth, sustainable recovery is far from guaranteed.&rdquo; <br /><br /><strong>JONATHAN LOYNES CAPITAL ECONOMICS</strong><br />&ldquo;Having announced an extension to QE only last month, there is time to assess their effectiveness. But I think the danger of deflation is still a far greater risk so would be ready to vote for more QE in the future.&rdquo;<br /><br /><strong>GRAEME LEACH INSTITUTE OF DIRECTORS</strong><br />&ldquo;At present, although we recognise we may be in a transition phase, recovery remains more hope than reality. Also, any interest rate change will only occur after the Bank of England has clearly outlined an exit strategy.&rdquo;<br /><br /><strong>MICHAEL SAUNDERS CITIGROUP</strong><br />&ldquo;The MPC do not need to add more stimulus so will leave rates and QE unchanged. The priority should be to fix the banking system and get the public finances back to sustainability, and QE cannot achieve that.&rdquo;