City A.M. shadow MPC votes 8-1 against rise in QE

ALLISTER HEATH | CITY A.M.
“Given the expansion of GDP in the second quarter, there would be no benefit to extending QE or cutting rates. The MPC needs to privately work on a way to exit from our current monetary policy, which is now a net drag on the economy.”
GRAEME LEACH | INSTITUTE OF DIRECTORS
“QE at £375bn and interest rates at 0.5 per cent need to remain unchanged for the time being. Let’s not take the punch bowl away from the party too quickly.”
GEORGE BUCKLEY | DEUTSCHE BANK
“Hold QE and rates. There are tentative signs of recovery, but with output lingering far below its pre-recession peaks the economy remains fragile. This supports the need for loose policy right now.”
VICKY REDWOOD | CAPITAL ECONOMICS
“Get ready to launch forward guidance at next week’s inflation report, but also announce more QE this week. The recovery is picking up pace but it remains hard to see what will drive it further.”
ROBERT WOOD | BERENBERG BANK
“Commit to keeping rates low until unemployment reaches seven per cent. We are seeing a consumer led recovery but real wages are still falling. So, for now, monetary policy has to stay loose.”
SIMON WARD | HENDERSON
“Hold rates, start sterilising ‘unofficial’ QE caused by income transfers, and signal that a reduction in policy stimulus will be warranted if current economic trends are sustained.”
VICKY PRYCE | EX-GOVERNMENT ADVISER
“Hold but keep options open for stimulus . Higher GDP forecasts for 2013 are welcome, but recovery owes much to government mortgage lending and a reduction in the savings ratio.”
TREVOR WILLIAMS | LLOYDS BANK
“Recent economic data confirm that recovery is consolidating, with GDP growth in positive territory for two consecutive quarters. But risks remain and so rates and QE should be held.”
ROSS WALKER | RBS
“Although the durability of the recovery remains uncertain, the underlying pick-up in activity over this year means it is hard to justify further loosening, through rates,QE or guidance.”