City A.M. shadow MPC votes 7-2 against more QE

ALLISTER HEATH | CITY A.M.

“No extra asset purchases and no reduction to rates. The money supply is growing steadily, and has recovered from the recession shock. And there has been another round of encouraging business survey figures that suggest we may narrowly avoid a triple-dip. The real issue is that supply-side constraints and unprecedentedly loose monetary policy have kept zombie firms on life support and prevented prices from adjusting, slowing the necessary economic readjustment.”

GRAEME LEACH | INSTITUTE OF DIRECTORS

“No change in rates or quantitative easing. The best thing the monetary policy committee (MPC) can do is sit there and do nothing. There doesn’t need to be any further stimulus to the economy at present due to the recent pick-up in broad money supply.”

SIMON WARD | HENDERSON

“Hold Bank Rate and quantitative easing. Policy laxity risks entrenching high inflation. Money growth is at a five-year high, while sterling weakness and falls in bank interest rates are delivering additional loosening. The economy is likely to surprise on the upside.”

GEORGE BUCKLEY | DEUTSCHE BANK

“No change in rates or quantitative easing (QE). If forecasts for a return to economic growth and sticky inflation are correct, then further QE should be avoided. However, the risks from the euro area remain and growth looks fragile.”

VICKY PRYCE | FORMER GOVT ADVISER

“Hold but be ready for more quantitative easing once forthcoming Budget measures are analysed and current trends become clearer. A more upbeat performance in the service sector contrasts with poorer manufacturing and construction data and weak lending figures.”

VICKY REDWOOD | CAPITAL ECONOMICS

“We need £50bn more quantitative easing. And if a Bank Rate cut really would hurt banks with lots of tracker mortgages, then cut the deposit rate the Bank of England pays on a portion of banks’ reserves instead as Paul Tucker suggested.”

TREVOR WILLIAMS | LLOYDS BANK

“Hold Bank Rate, but ease further via extra quantitative easing. After a good start to the year signs are that growth is softening, perhaps affected by weather conditions. Even if the money supply is improving, action seems justified.”

ROBERT WOOD | BERENBERG BANK

“No change to rates but £50bn more quantitative easing. The UK can grow, but it needs a helping hand to boost demand. Output has gone nowhere for the best part of two years. There is no sign at all of any dangerous inflationary pressure.”

ROSS WALKER | RBS

“No change in rates or asset purchases. In general, the merits of further quantitative easing are increasingly doubtful. For March’s meeting, underlying data trends are largely unaltered while currency and bond markets have moved significantly in a dovish way.”