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.”
25 Jul 2014
Rail passengers and businesses across Essex, Suffolk and Norfolk are today being urged to join the campaign calling on Government for greater investment in the Great Eastern Main Line.
25 Jul 2014
Working through a heatwave
Employers may be required to take action if employees complain that it’s too hot to work
The current summer heatwave has renewed the debate about safe working temperatures, and the indications are that climate change will bring more frequent episodes of extreme weather, leading the UK to experience more hot spells.
23 Jul 2014
Trinity Park, Ipswich – Wednesday 22 October 2014