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Lower money supply makes more QE likely
A STEEP decline in money supply added to expectations that an additional £50bn or £75bn of quantitative easing (QE) will be announced by the Bank of England’s Monetary Policy Committee at its February meeting next week.
The 0.7 per cent fall in the M4 measure in December is the sharpest since the series began in July 2009, and was led by a decline in lending to companies. Another factor may be that securities dealers trimmed balance sheet towards the year-end.