Peter Brown

PAYdata Blog, 29 September 2011

 

 

The Bank of England's Monetary Policy Committee (MPC) voted by nine to zero to keep the interest rate at 0.5% - where it has been since March 2009.  This is the first time in quite a while that there have been no dissenting voices on the Committee.  This emphasises how fragile the MPC, and the financial world in general, thinks the global economic recovery is.

 

In contrast, the calls for another round of Quantitative Easing (QE) are growing.  QE is the mechanism the Bank can employ to inject money into the economy through asset purchases.  

 

So far the Bank has spent some £200bn and a number of people, including, Adam Posen, himself a member of the MPC, are calling for a further £50bn to be deployed to try to bolster the flagging recovery.  In fairness to Mr Posen, he has been arguing for more QE since early in 2011.  Without some more positive economic news it may be that the prevailing wisdom could be moving in that direction.

If you want to keep up to data with the latest inflation figures then why not sign up to receive a copy of PAYstats, via email each month.  PAYstats is a small monthly publication focusing on inflation, employment and average earnings.