CITY A.M.’s panel of economists has voted 8-1 against a further increase in the Bank of England’s programme of asset purchases.
In June, the vote reflected the monetary policy committee’s (MPC) actual decision, with six against and three in favour of increasing the size of purchases through quantitative easing (QE).
This month, all of our shadow MPC members advocate holding rates at their current historic low, given the early stages of the apparent recovery taking place.
The vote reflects surveys showing the UK’s economy appears to be improving, especially the very strong purchasing managers’ index for the services sector, which was announced yesterday.
The MPC decision today will be new governor Mark Carney’s first at the Bank, but few analysts predict any major changes. If Carney is to introduce changes in the way the Bank conducts monetary policy, the inflation report in August is more likely to be his choice, analysts say.
The US Federal Reserve has recently discussed the conditions under which it would slow down its programme of QE, causing financial markets to panic.