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.”
03 May 2016
Bury Local Links Newsletter May 2016
03 May 2016
Suffolk-based PR agency Genesis PR has been shortlisted for the coveted national title of Outstanding Small Public Relations Consultancy of the Year at the 2016 Chartered Institute of Public Relations (CIPR) Excellence Awards. Genesis is the only agency from the East of England to make the final shortlist.
28 Apr 2016
Ginny Idehen, Suffolk Mind’s Quay Place Manager, has been elected this week as the new Chair of Suffolk Business Women (SBW), the market leading organisation in the county and part of Suffolk Chamber of Commerce.