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Hint on further quantitative easing

Bank of England deputy governor Charles Bean has hinted at a conference of central bankers that further quantitative easing may be required to sustain economic recovery.

Mr Bean told delegates at the US Federal Reserve's annual symposium in Jackson Hole, Wyoming, that policymakers had prevented a financial market collapse but further action might be required.

At the same event, US Federal Reserve chief Ben Bernanke set out "unconventional" policy options to boost the US economy.

Presenting a report to the conference on Saturday, Mr Bean said: "The deleveraging process is incomplete, the recovery remains fragile and a considerable margin of spare capacity is yet to be worked off.

"Further policy action may yet be necessary to keep the recovery on track."

But he added that "normal times will surely return in due course".

The Bank of England's monetary policy committee, of which Mr Bean is a member, has been split over the need for further economic support as Chancellor George Osborne's belt-tightening budget comes into force.

Earlier in the month, Bank of England governor Mervyn King warned growth will be weaker than previously forecast.

Last month, the Bank of England held its asset purchase programme - also known as quantitative easing - at £200 billion, and kept interest rates at a record low of 0.5%.

In his speech to the conference, Mr Bernanke raised the prospect of another purchase of securities by the Fed in order to drive down rates on mortgages and other debt.


From Belfast Telegraph