PAYdata Blog, 01 November 2011
  

Last month we suggested that the Monetary Policy Committee (MPC) of the Bank of England might soon decide to add some new money to the economy through quantitative easing (QE).  After months when the MPC was split on the value of QE, in October they unanimously decided to inject a further £75 billion into the economy. Their aim is to resuscitate the teetering recovery, whilst getting inflation back to a more comfortable level.

Will it make a difference?  In all honesty I fear that we mere mortals are not well placed to judge.  Indeed, I suspect that in another year’s time, even with the benefit of hindsight, we might still struggle to conclude whether it did or did not work.  No doubt there will be opposing views, no doubt heavily coloured by political and philosophical biases.

The MPC’s collective thoughts are worth noting.  Their view is that the £200 billion of QE that has already taken place has done some good.  They conceded that “while there was considerable uncertainty about the magnitudes, the earlier asset purchases had had economically significant effects”.  Their conclusion, after balancing upsides and downsides, was that “The scale of the downward reassessment of the medium-term inflation outlook suggested that substantial further asset purchases were appropriate”.

Let’s hope that they are correct.

You can read the full minutes of the October MPC meeting here.

Features of include: 

- ‘At a glance’ statistics - Key areas such as inflation, employment and average earnings;
- Detailed statistics - Employment and average earnings by industry sector;
- Current statutory rates - a handy HR reference guide.      

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