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MPC may need to extend QE

Further quantitative easing may be needed, the Bank of England’s David Miles said yesterday. He said: “It is entirely plausible that as economic events unfold it will become clear that an even more expansionary monetary policy will be appropriate.” Miles had voted in November for a £15bn extension but earlier this month agreed it should be paused. “There are still more risks of growth not recovering to more normal levels than of substantially exceeding it,” he said. “And around the most likely outcome for inflation – which moves from well above the target to below it – there are on balance a few more upside than downside risks,” he said. Speaking at Imperial College, London, Miles said risks that inflation would exceed the BOE’s central forecast were high.