CITY A.M. | SHADOW MPC

ALLISTER HEATH | CITY A.M.
“The Eurozone debt crisis is throwing everything out of kilter, with uncertainty hammering markets and the financial system under renewed pressure. We should therefore hold interest rates until the picture becomes clearer again. But we don't need any more quantitative easing.”

SIMON WARD | HENDERSON
“Hold this month because of global financial instability but raise rates as soon as conditions normalise. The economy is not suffering from a shortage of money – broad liquidity rose by 4.5 per cent in the year to July. More QE would trigger sterling weakness, boosting import prices and inflation rather than activity.”

GEORGE BUCKLEY | DEUTSCHE BANK
"Hold. Market fragility and a weaker economic outlook has closed the window of opportunity for raising rates. However, the hurdle for further easing, either in terms of lower rates or more asset purchases, remains high."

VICKY PRYCE | FTI CONSULTING
“Hold, but give serious thought to quantitative easing as part of stimulus package. The US and European economies are stalling, UK forecasts are continuously being downgraded, and recent indicators all point to a serious chance of weak growth ahead.”

JONATHAN LOYNES | CAPITAL ECONOMICS
“Immediate £50bn increase of the asset purchase programme. We at Capital Economics have long warned that the recovery would run out of steam and that the economy would need more support. With inflation worries subsiding and recession risks rising by day, there is no point in waiting.”

TREVOR WILLIAMS | LLOYDS TSB
“Hold. The financial market uncertainty, the issues in the US and potential fallout from Euro defaults have added too much uncertainty to the economic outlook. QE is not the solution, though. Inflation is a worry, and rates will have to be raised in the medium term to combat it.”

HOWARD ARCHER | IHS GLOBAL INSIGHT
“No change on interest rates or quantitative easing. The economy’s current weakness and the worrying domestic and global outlook means that the case for more QE is strengthening but I would hold fire for now at least given current elevated inflation.”

JAMIE DANNHAUSER | LOMBARD STREET
“Hold. Acute tensions are once again appearing in bank funding markets. The MPC should stand ready for additional monetary easing, if market conditions worsen materially. For the moment, the MPC should stay put though.”

GRAEME LEACH | IOD
“£50bn expansion of the asset purchase programme. The time to launch QE2 is drawing near. We can’t rely on an increase in the velocity of money to avoid a continued L-shaped recovery or a double-dip.”