Miles not in favour of QE2

Julian Harris
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SENIOR Bank of England rate-setter David Miles has dismissed calls for more quantitative easing, despite the UK’s stuttering recovery and market instability.

“There could be circumstances under which I would judge the right policy would be to embark on further asset purchases but that’s not how I’ve seen things thus far,” Miles told Dow Jones after a week in which the FTSE dropped below 5,000 for the first time since July 2010.

His comments run against the grain of the Bank’s inflation report conference last week, in which governor Mervyn King hinted that a second phase of quantitative easing, dubbed QE2, could be in the pipeline.

“We’re not out of tools; if we need to we can carry out more asset purchases,” King told reporters.

“The committee will have to decide if it wants to do that and if so, when. Last week we opted not to do that. But there’s no technical reason [why] we cannot do that,” King added.