CITY A.M. | SHADOW MPC

ALLISTER HEATH | CITY A.M.
“With the services sector growing at a faster rate, the supply and velocity of money accelerating, and inflation too high, it is time for a symbolic quarter point hike in rates.”

SIMON WARD | HENDERSON
“Maintain vote for quarter-point hike. Monetary conditions are loose with velocity recovering, while CPI inflation could rise to 4 per cent near-term. QE2 will fuel commodities speculation rather than help the real economy.”

GEORGE BUCKLEY | DEUTSCHE BANK
“While the economic news has become less positive, the slowing growth momentum does not seem sufficient yet to justify further easing in policy. The risks of additional QE have grown but for now its wait and see.”

MICHAEL SAUNDERS | CITIGROUP
“The MPC may produce an unusual three-way split, but the majority will vote to hold. With the rebound in nominal GDP and sticky inflation, Posen is unlikely to find much support for his view that the UK is like Japan.”

VICKY REDWOOD | CAPITAL ECONOMICS
“The recovery has slowed sharply, while higher inflation still isn’t having much upward effect on inflation expectations or pay growth. I think the time has come to launch QE but the MPC will probably hold fire.”

TREVOR WILLIAMS | LLOYDS TSB
“Signs of a weakening in the UK economy are becoming more widespread. I vote for rates to remain on hold in October and for a further £50bn of QE. The latter should start before the fiscal squeeze kicks in next year.”

HOWARD ARCHER | IHS GLOBAL INSIGHT
“No change on rates and I would hold fire on QE for the time being. But I am worried about the growth outlook and if the economy takes a further downward lurch then further stimulative action would be justified.”

JAMIE DANNHAUSER | LOMBARD STREET RESEARCH
“We have long argued that the MPC should err on the side of doing too much. But with nominal private sector spending up by 8 per cent in the last year, at this stage the data does not support the bears’ case.”

GRAEME LEACH | IOD
“Beyond this month, an expansion in QE looks almost certain by year-end, given the weakness of money supply growth and the softening across a range of economic indicators.”