MPC must act boldly to increase benefits of QE, says BCC

MPC must act boldly to increase benefits of QE, says BCC

05 Apr 2012

  • ‘Keeping rates and QE programme on hold was the right decision’
  • ‘QE has not led to meaningful increases in lending to businesses’

Commenting on today’s Monetary Policy Committee (MPC) decision, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“Following the February increase in Quantitative Easing (QE), the decision to keep interest rates and the QE programme on hold was widely expected. With QE still being implemented, and given the MPC’s self-imposed practice of only buying gilts, this was the right decision. However, last month two MPC members voted for an increase in QE to £350bn. While support for this may be strengthening, we believe that adding to QE would be unnecessary.

“We supported past increases in QE because they eased pressures on the banking system and helped to underpin financial stability. However, this has not led to meaningful increases in lending to small businesses, and the benefits to the real economy have been limited. Increasing QE now would only have a marginal effect. There is ample liquidity in the financial system and there is no need to drive down yields on government bonds further.

"The main policy aim must be boosting the unduly low rate of economic growth by increasing lending to viable businesses. To achieve this, it is vital to make the new credit-easing scheme more substantial. But the MPC also has a part to play. The committee should reconsider its reluctance to include assets other than gilts in the QE programme, such as securitised SME loans. This will make the banks less risk averse, and will help to improve the flow of lending to credit-worthy firms.”

 

LATEST NEWS

Higher Apprenticeship – Leadership & Management

05 Sep 2016

Qualification Overview

The Higher Apprenticeship in Leadership & Management comprises two qualifications:

  • Level 5 Diploma in Leadership & Management
  • Level 5 NVQ Diploma in Leadership & Management

Qualifications are awarded by iCQ.

Delegates will typically be employed in middle management roles, or have a junior management role with the potential/aspiration to progress into a more senior role.

275 Jobs Secure Following Acquisition of Cambridge Cleaning Firm

25 May 2016

Monthind Holdings Ltd., the parent company of Monthind Clean LLP has announced the acquisition of Cambridge-based commercial cleaning contractor Atkins Gregory.

Ipswich Chamber of Commerce chair: “We must all be ambassadors for Ipswich!”

24 May 2016

Over 90 local businesses and other organisations turned up to Trinity Park last Friday (20th May) where Greater Ipswich Chamber of Commerce hosted an Networking Brunch event at which the Ipswich Vision was the main topic under discussion.

© Suffolk Chamber of Commerce 1884-2016

Site map |  Code of Membership  |  Privacy/Cookies  |  Disclaimer  |  Accessibility statement | Website by Free Rein