CITY A.M. | SHADOW MPC VOTES 5-4 FOR QE2

ALLISTER HEATH | CITY A.M.
“Rates should be held and there should be no additional QE. Further easing should only be considered if the Eurozone crisis spirals out of control and triggers another meltdown. Otherwise, policy should remain unchanged until the context becomes clearer. Inflation remains far too high.”

SIMON WARD | HENDERSON
“Hold rates, raise when financial conditions normalise. Broad liquidity is growing at a four to five per cent rate – economic weakness is not due to a shortage of money. More quantitative easing could tank sterling and delay much-needed inflation relief.”

GEORGE BUCKLEY | DEUTSCHE BANK
“Conditions have deteriorated over recent months, possibly requiring more monetary support going forward. But with inflation rising and third quarter growth likely to have been positive, we argue for policy on hold right now.”

VICKY PRYCE | FTI CONSULTING
“Hold rates, but time has come for the QE button to be pressed. The Chancellor's 'credit easing' line in the Conservative party conference gives the game away. Despite slightly better manufacturing data there is increasing consensus that the economy needs urgent kick-starting.”

JONATHAN LOYNES | CAPITAL ECONOMICS
“With the news on the global and UK economies worsening by the day and the Eurozone crisis presenting a major threat, it is clear that the economy needs more policy support. I would vote for an immediate £50bn extension of the asset purchase programme but I suspect that more will ultimately be needed.”

TREVOR WILLIAMS | LLOYDS TSB
“Keep rates on hold, and delay QE unless the Eurozone crisis deepens and puts the UK at risk of recession. With UK inflation still high and yet to peak, policy should not be loosened. Economic recovery will be slow due to high debt levels and however low interest rates get they will not kick-start a strong rebound in activity.”

HOWARD ARCHER | IHS GLOBAL INSIGHT
“Increase quantitative easing by £50bn. The danger of a renewed recession is mounting and with the coalition government set to stick to its fiscal austerity guns, monetary policy needs to lead the way. Inflation is likely to fall sharply before long.”

JAMIE DANNHAUSER | LOMBARD STREET RESEARCH
“Hold rates and kick off QE2. The Eurozone may now be in recession. Significant downside risks still overshadow growth in the UK’s main trading partner. With ongoing tensions in bank funding markets, the time has come for more quantitative easing.”

GRAEME LEACH | IOD
“The latest GDP figures strengthen our view that the time is right to launch more quantitative easing (QE2) – near zero GDP and money supply growth make a compelling argument. I am voting to hold interest rates and expand the asset purchase program.”