Further QE questioned as broad money lending shows growth

QUANTITATIVE easing (QE) is having an impact on the money supply, provisional September figures from the Bank of England suggested yesterday.<br /><br />Broad money (M4) increased by &pound;14.7bn, above the average flow for the previous six months. There was also a pick up in the lending of broad money, which rose 0.7 per cent in September on the previous month. <br /><br />Although the annual growth rates for both measures fell, analysts said this was because distortions within the financial sector were boosting the figures this time last year.<br /><br />While this better data might deter the Bank from extending QE, Capital Economics&rsquo; Vicky Redwood said: &ldquo;With such a severe fiscal squeeze looming, there remains a good case for keeping monetary policy loose and in fact extending QE further.&rdquo;