Posen claims QE needed to avoid lasting damage

MONETARY policy committee (MPC) arch-dove Adam Posen argued the case for further loosening in a speech to businesses in the south west yesterday.

Posen (right) pointed to the Bank of England’s forecasts that inflation is about to peak and that the present danger is weak economic growth.

“If we do not undertake the stimulative policy that the grim outlook calls for, our economies and our people will suffer avoidable and potentially lasting damage,” he said, blaming “distortions and falsehoods” for persuading some economists to oppose his plans for more quantitative easing (QE).

Former MPC member David Blanchflower has weighed into the debate, backing Posen’s demands for further QE.