CITY A.M. | SHADOW MPC NARROWLY IN FAVOUR OF HOLDING STEADY

ALLISTER HEATH | CITY A.M.
“No change in rates or QE. Economic woes are not being caused by tight monetary policy. Rather, supply side reforms are still desperately needed, while on the demand side the restrictions on banks are holding back credit. The crisis can’t be solved with increasingly ultra-loose monetary tactics.”

SIMON WARD | HENDERSON
“Hold rates and QE. The Bank of England should offer banks ECB-style longer-term funding linked to the Bank rate and against wide collateral to improve credit availability and reduce borrowing costs. There is no obvious shortage of money in the economy warranting more gilt purchases.”

GEORGE BUCKLEY | DEUTSCHE BANK
“I’d vote for £50bn of extra quantitative easing. The combination of weaker economic news in the UK and concerns about the possible impact of the euro crisis on the economy highlight the need for further monetary support.”

VICKY PRYCE | FTI CONSULTING
“Hold but consider further quantitative easing with wider scope as inflation fears ease. UK manufacturing data is disappointing and the global recovery appears to be faltering with downbeat IMF and OECD forecasts and still no consensus on how to best tackle the Eurozone crisis.”

VICKY REDWOOD | CAPITAL ECONOMICS
“£50bn more QE. The Eurozone threat is intensifying, the economic outlook remains grim and inflationary pressures are abating. The Bank of England’s Monetary Policy Committee should do more gilt purchases and think about what else it can do.”

TREVOR WILLIAMS | LLOYDS TSB
“With the UK economy in recession, money supply growth weak and Europe in turmoil, it seems imperative to me that there is more monetary stimulus. At a minimum, there should be quantitative easing announced of £50bn, spent on a wider range of instruments.”

HOLGER SCHMIEDING | BERENBERG BANK
“£50bn more asset purchases, with a statement that fewer bonds would be bought if the economic outlook were to improve soon. The recent drop in leading indicators such as the manufacturing PMI suggests that the UK economy will be hit as hard as the Eurozone by the current financial turbulences.”

ROSS WALKER | RBS
“A finely-balanced decision as clearer evidence emerges of contagion from the financial crisis to the real economy. But the case for additional quantitative easing is not yet compelling – some of the recent weakness may prove temporary and inflation remains above target.”

GRAEME LEACH | INSTITUTE OF DIRECTORS
“At present there isn’t enough money sloshing around or changing hands fast enough, but we need another set of monthly money supply figures before making a decision for more quantitative easing. Hold for now.”